The excitement of business ownership
Owning your own business is an exciting experience. You’re reaching your goals and working hard to achieve those all-important professional milestones. Like most small business owners, you do most, if not all, of the work yourself. You log incredibly long hours and you put everything you have into your business venture and your professional dream. But you’ll get to a point when you can’t do it all on your own anymore.
So, how do you know when to make the next move and hire your first employee? That’s a huge, exciting step, but you’ll need to make sure you’re ready and your business is ready for that growth. And here are just a few ways to figure that out:
You’ll eventually reach a point where it makes more economic sense to hire someone than only doing all the work by yourself. After all, you don’t want to lose business because you can’t keep up with current demands and you are no longer able to take on new clients or customers.
That does not support professional growth. You’ll need at least some time to devote to expanding your brand. When your business has stagnated because your lack of available time, that’s the first sign that you should make your first hire.
The second flag to look for when deciding if it’s time to hire someone to help you is if you’d like to focus on one particular area of your business rather than all of the areas. For instance, if you want to focus on marketing your business or services at national or international conferences, for instance, you’ll need someone to hold down the fort at home.
Or, maybe you want to focus on developing your services and it will ultimately benefit your company to give some of the other duties to someone else. You’ll need to realize that you can’t do everything by yourself and expect your business to continue to grow.
Taking business to the next level
When you find a professional connection that can take your business to a whole new level, it’s time to reconsider how you run your business and how and when to bring on employees. Always be on the lookout for exciting talent and skills that can enhance how your business is run and can improve your product or services. Finding the right employee may be a sign all on its own. Good talent gets scooped up quickly. Make sure you’re doing the scooping.
However, once you’ve determined that it’s time to hire your first employee, you may not immediately have the funds to do so. But doesn’t mean it’s the end of the road. Take some time to reevaluate your finances and your company’s financial potential. Hiring someone to help with the the work can open up your schedule, so that you can focus on expanding your professional outreach and influence.
Here’s why receiving big funding doesn’t guarantee startup success
(BUSINESS ENTREPRENEUR) You finally got that big funding check that allows you to make your dreams come true, but most startups fail because they shoot for the moon.
The first thing every startup needs to get off the ground is funding. It’s crucial to have enough capital to cover equipment, inventory, and employee salaries, along with other basic expenses unique to the industry. Most startups cover these initial costs through business loans and capital from private investors.
Some business owners perceive getting funded as the first milestone toward success. While receiving capital is critical for success, being well-funded doesn’t guarantee success. Plenty of well-funded startups have failed, gone bankrupt, and all but disappeared.
How could so many well-funded startups possibly go under? The 90% failure rate for startups is due to a variety of factors including bad timing, no market, and most of all – mishandling of finances.
Here’s why receiving big capital doesn’t guarantee success.
Getting investment capital provides false hope.
Getting funded can make you feel invincible and cause you to be too relaxed about spending money. It’s a powerful feeling to have plenty of money and know an investor believes in your business. Investors are smart; they wouldn’t throw money at a startup unless they had every reason to believe it will succeed, right? Not exactly.
Startups in big tech areas like Silicon Valley and San Francisco often have an easy time generating large amounts of capital from investors who can’t wait to throw money at the latest startup. Many investors ignore risk and throw their money at long-shot bets hoping to invest in the next Facebook or Instagram. The size of the pot is too mesmerizing not to take the risk.
These long-shot bets carry similar odds to winning a “Pick 6” bet in horse racing. The Pick 6 is one of the hardest bets to win because you have to pick the winning horses for six consecutive races. What if the top horse becomes injured before the sixth race? Investors who toss money at random startups have to pick a startup that will continue to meet all the right circumstances to become profitable long-term. Some of those circumstances are unpredictable.
No business owner wants to view their startup as a long-shot bet. However, the reality is that many startups are. You can’t gauge your potential for success based on how much funding you receive.
Having plenty of cash encourages premature scaling.
When you’ve got the cash to scale your startup it seems like a waste not to dive in. Just one look around the internet reveals plenty of videos and articles encouraging entrepreneurs to scale their business. Advice online gives the impression that if you’re not scaling your business, you’re falling behind. However, scaling too soon can tank your startup.
Research conducted by Startup Genome found premature scaling to be the number one cause of startup failure. Nathan Furr from Forbes.com explains this finding and what it means for businesses. Premature scaling is defined as “spending money beyond the essentials on growing the business (e.g., hiring sales personnel, expensive marketing, perfecting the product, leasing offices, etc.) before nailing the product/market fit.” Furr says any business is susceptible to premature scaling – not just startups.
The problem is that premature scaling depletes your cash reserves more quickly. This leaves you with less cash to fix mistakes and readjust as you go along. Failure is what happens when you don’t have the necessary cash to fix mistakes and move toward success.
To increase the odds of developing a long-term successful startup, here’s what you can do:
• Save as much money as possible. For instance, you don’t need a giant office with expensive furniture right away. Work from home and hire a remote team until an office is absolutely necessary.
• Make sure the cost of acquiring each customer makes sense. Know how much money you’re spending to acquire each customer. Track all marketing efforts and eliminate the avenues that don’t generate paying, loyal customers. If the cost to acquire a customer is more than what they spend with your company, revisit your marketing strategy.
• Aim for an order-of-magnitude improvement with your innovation. Skip Prichard advises startups to strive for a 10x increase in the value of whatever innovation is being provided to the world. For example, if your company is offering a lower price for a greater value, aim to increase the value 10x. Attract the early adopters who want big improvements and they will validate you.
Money is a tool – use it wisely
Celebrate when you get your funding, but keep that money in the bank for necessary expenses. Money is a tool that doesn’t guarantee success, but if you budget wisely, you’ll have a better chance at beating the startup odds.
Reclaim your precious time as a burnt out freelancer or entrepreneur
(ENTREPRENEUR) Being your own boss comes with great reward, but one major risk is time inefficiencies – let’s discuss how you can streamline productivity.
As we all know too well, entrepreneurs are time-poor.
Changing the world of technology, developing a life-changing product, or finding a new process to a complicated, lengthy task, entrepreneurs are continually moving, shaping, and evolving their world around them, but frequently run out of time at the end of their day.
Now many modern entrepreneurs have some form of productivity in place. Whether this is an A3 piece of paper with jottings of what needs to be done next or a manageable to-do list provided by their smartphone where they can brain dump all of their ideas and to-dos into one space.
Working smarter, and harder is usually the object of all those looking to create a new business. But respecting the value of productivity applications can play into the hands of those building the next Facebook or Amazon.
By all means, this doesn’t mean you need the correct productivity tools to become the next prominent entrepreneur, if that’s the case we’d have much fewer businesses than we have now thriving, the thesis of this is for entrepreneurs and business owners to begin embracing productivity apps to help them scale and capture essential parts of their day to help get more done.
So where does an entrepreneur start?
It’s straightforward. Begin with three core tools.
* A to-do list application.
* A note-taking tool.
* A calendar application.
These three resources will provide you with the fundamental pillars of productivity in your hectic schedule. Let’s examine how that is the case for each one.
A to-do list application can be a primary list of actionable items for the next 30-days. Think of a to-do list application as your day planner, an actionable set of tasks to get done on the workday.
This window of to-dos will determine your ground-level work and checklist for the day. Traditionally they are prioritized allowing you to accomplish the most critical tasks first or get them done by the end of the day so that you can help progress forward.
This is a potential master tool for the entrepreneur. A to-do list app can help you capture, deter and plan things to do helping to reduce stress and reliability in your brain to remember critical tasks and actions. A proactive theory from the book Getting Things Done by David Allen helps to define this as “open loops” a process that highlights a need to reduce active to-do’s in your head and to capture them on paper or another form of capture method to relieve your brain’s activity focusing on this.
A note-taking tool provides you with a way to capture essential data or information. Unlike a to-do list application, the information you’ll be capturing is static. This means it isn’t necessarily actionable but provides value for reference or planning. Notes are handy for planning and reference purposes. When it comes to planning your projects and high-level work (like clients, product updates, accounting, etc.) using notes will help you to collect everything into one hub to help you to complete all your major projects and tasks.
And finally, a calendar application works as how you’d expect. A way to capture events and activities. Not to be confused with a to-do list application, the calendar application should solely include events and activities, not tasks. Feel free to use the calendar layout to block out time but don’t get into the habit of adding tasks to your calendar application, it’ll make things very messy!
So what productivity apps should I start with?! Let’s give you some recommendations.
For a to-do list application, an entrepreneur should look for flexibility to scale with the application but the patience to stick with an application to help them get more done. To-do list applications perfect for entrepreneurs include Todoist, TickTick, Asana, Nozbe, or Trello. They are strong starting points and will provide you with all the features you’ll need to start capturing and sorting those important to-dos.
Note-taking tools come highly recommended. To help the scale-driven entrepreneur, there are two tools that stand out as the resources entrepreneurs should consider when looking at note-taking applications. They would be Evernote and OneNote. Both provide you with functional experiences for bringing notes in from email, documents, and other files helping you to free up time and space. Avoid Apple Notes as your default and sole way of the organization as due to the lack of folders/notebooks you struggle to keep things as organized as you would with the likes of Evernote and OneNote.
Calendar resources are rare to find. Entrepreneurs will discover themselves freeing up a lot of stress by using a calendar tool, by being able to see all the activities coming up, and help free up your calendar for important meetings. The features within the calendar tools like “invite a guest” will provide a way to connect with your invitee and avoid any miss-capture of time/date for the meeting.
Try Fantastical 2 (Mac/iOS), Google Calendar, Kin Calendar, or Calendars 5 (iOS). These are more advanced calendar tools, so if you are concerned, it’s okay to try Apple Calendar or Outlook Calendar, just make sure you solely use one calendar and not multiple to avoid missing those meetings.
In essence, entrepreneurs should consider productivity app to help control their time. Helping to implement a system might take a few weeks to get used to and a few tweaks along the way, but it’ll undoubtedly free up time from stress and worry, helping you to do the more valuable things like communicating with your customers, chatting with your clients or growing your team.
‘Small’ business is a point of pride in the US, no longer a stigma
(BUSINESS ENTREPRENEUR) Small businesses make up the majority of companies, employers, and money makers of the American economy, that’s something to be proud of.
Prior to the Industrial Revolution, all businesses were small businesses. Independent craftsmen served communities with vital services. Small merchants opened shops to provide the community with goods. Lawyers, doctors, and other professionals hung out a shingle to offer their services to neighbors. Small businesses were the norm. Some of the most beloved American companies started out local. John Deere, Harley Davidson, and King Arthur Flour, all got their start as small businesses.
Business changes led to a attitude change
It wasn’t until manufacturing allowed businesses to scale and produce more efficiently that the idea of big business became more important. Post-World War II, the idea of a small business became derogatory. It was the age of big government. Media was growing. Everyone wanted to be on top. Small businesses took a back seat as people moved from rural to urban communities. Small business growth plateaued for a number of years in the mid-20th century. Fortunately, the stigma of small business is fading.
Small businesses are the backbone of the economy
According to the Small Business & Entrepreneurship Council, the “American business is overwhelmingly small business.” In 2016, 99.7% of firms in American had fewer than 500 workers. Firms with 20 workers or less accounted for 89.0% of the 5.6 million employer firms. The SBE also reports that “Small businesses accounted for 61.8% of net new jobs from the first quarter of 1993 until the third quarter of 2016.” Small businesses account for a huge portion of innovation and growth in today’s economy.
Modern consumers support small businesses
According to a Guidant Financial survey, the most common reason for opening a small business is to be your own boss. Small business owners are also dissatisfied with corporate America. Consumers also want to support small businesses. SCORE reports that 91% of Americans patronize a small business at least once a week. Almost half of Americans (47%) frequent small businesses 2 to 4 times a week.
Be proud of small business status
Small businesses are the innovators of tomorrow. Your neighbors want to support small businesses, knowing that their tax dollars stay in the community, and that they’re creating opportunities within their own city. Your small business status isn’t a slight. It’s a source of pride in today’s economy. Celebrate the fact that you’ve stepped out on your own in uncertain times. Celebrate the dirt under your fingernails, literally, or figuratively, that made you take a risk to do what mattered to you.
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