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Starting a business is far from an easy task. There are dozens of things to know before embarking on the life changing adventure of turning a career into a company.
The business I run now, Thrive Software, is a result of the lessons and experiences I gained when I owned a creative agency. I started my career as a designer, a craft that has been key to my professional life.
A craft can be taught; you can train in crafts until you master the skills and tools of your trade.
Business skills, however, are often picked up on the fly as you try to muddle through sales, marketing, admin, payroll and all of the other tasks you need to accomplish as you turn an idea into a viable company.
Jerome discusses this in more detail in his #smallbiz_expert Twitter interview.
Friends and mentors in the business community are our best supporters. And thanks to the Internet, the community is larger than ever before.
This unofficial support network only functions when we pay advice forward, which is why I am passing on my experience to anyone starting a business today.
1. Stay Lean
So how do you make your business successful? Keeping costs low is essential, and not just in the early days. The less you spend, the more profit you retain. However, the math isn’t quite that simple. Certain costs, such as sales and marketing, directly impact the bottom line if you aren’t actively pursuing growth targets, and that means spending money.
Just be careful how you spend it – measure everything.
Other costs, such as an office, nice furniture, business travel, trade shows and expos, are not always essential. Learn where and how to cut costs, and then keep that mentality no matter how fast your company grows.
Within this lean mentality is the need to keep records and produce cash flow projections monthly.
Studies show that 80% of businesses who calculate cash flow monthly are more likely to survive compared to the 36% that only calculate cash flow annually.
2. Recruit Mentors
Before you know exactly what business you want to start, speak to people in your local startup community.
Begin talking about your idea. That’s the most effective way to find people who’ve been-there-done-that and made mistakes you want to avoid.
Without a doubt, you will make new mistakes – we all do, but at least this way you can avoid some of the pitfalls and branches in your path.
Dr. Lois Zachary, a world-leading expert and author of several books on this topic, points out that mentoring reduces business failure rates and improves mental resilience, amongst numerous other benefits.
3. Design Processes & Systems
Most employees in the corporate world have guidelines and Key Performance Indicators (KPIs) and other targets that managers use to determine who is performing and who needs extra support.
Why should small businesses and startups be any different?
You and your team also need training and some level of certainty.
Silicon Valley VC and author of The Hard Thing About Hard Things, Ben Horowitz, advocates that CEO’s be committed to training their team to encourage retention and improve performance.
4. Spend time on Intangibles: Culture, Values
Having a clear idea of the values of your company – where you want to take it (a vision of success) and how that fits around a personal vision for your life – is motivation on steroids.
But more than that, creating and carefully building a culture together as a team is the key to attracting the kinds of clients and employees you want to work with.
A Columbia University study found that turnover in companies with strong, positive culture is only 13.9%, compared to 48.4% in negative culture environments.
5. Spend time with Family & Friends
Don’t forget to have a life and don’t neglect those who mean the most to you.
Starting a business isn’t an excuse to get out of family events and obligations; it’s a job, like any other. Having a work/life balance is crucial to your success and sanity.
Business owners should be especially vigilant when it comes to maintaining balance; it’s critical to the viability of the company.
David Cohen, founder of the global startup accelerator TechStars, strongly advocates that time away from the office is a way to recharge and refresh for the next challenge.
6. Keep Accurate Records
Working on administrative tasks isn’t fun. But neither is getting a massive bill from your accountant when year-end financials are due, and you can’t find the paperwork.
A business owner should build in time for admin tasks, even if that means just supporting an assistant with this work.
Make it a monthly target and find a way to be answerable to someone else, such as a mentor or accountant.
7. Ask Yourself (and other stakeholders): Are You Happy?
Running a business isn’t just hard work – it’s a rollercoaster ride, with more ups and downs than any other job.
Naturally, this causes a lot of stress.
While this is something entrepreneurs are getting more comfortable talking about, it’s still too easily masked with the grin-and-bear-it approach.
Stress can be managed, but if you aren’t happy then that’s more of a serious problem.
A startup or any business that makes the owner or founders miserable isn’t worth the blood, sweat and tears invested in the venture.
Money and time aside, running a business is a lot of work. Make sure yours is a labour of love, rather than a painful endurance match.
What could you do today to make your business even more awesome?
- Take a look at your cash flow forecasts. Find something that needs cutting, or something to invest in, which would benefit the bottom line.
- Phone or email a mentor, or someone you know/admire who could be a mentor, and invite them for coffee.
- Ask your team what training they would benefit from and then figure out how to deliver it within the next few months.
- Spend time with friends and family.
- Check on how up to date your financial records are and set aside time to get admin tasks under control.
- Ask Yourself (and other stakeholders): Are You Happy?
This blog post is brought to you by Jerome Iveson, the Founder of Thrive and creator of Team, a beautiful business management tool for creative and digital studios. Sign up for a Free Trial and Supercharge Your Studio today.