Assuming you’ve done everything from a business plan, market research, promotions, and even finances, what else have you put into your small business? A lot of times, small businesses work well even without a well thought out system or structure. You may catch on to see big growth in the next few months, year or so. But businesses also fail if the growth isn’t kept in check. People tend to see the lack of sales to be the main cause of closing, but people tend to overlook that businesses also fail for other reasons like excessive growth or lack thereof. Here are our 5 tips for small businesses.
See the bigger picture
Sales are good and you’re making good profits, it’s time to hire a staff or two to manage the smaller details. Oftentimes, small business owners are used to managing most of their operations. Some forget that there are bigger decisions to focus on or some neglect handing over the responsibility entirely. A large part of owning a business is making decisions. And as business owners, you have to step back at some point to see how the business works as a whole.
Micromanaging your business will only work if the scale is small enough for you to juggle all of the tasks and not get clouded with all the smaller tasks you can actually turn over to someone else. Nevertheless, finding the right balance and knowing when to be hands-on and when to step back is something you’ll learn with experience.
Handpick your team
If you’ll be handing tasks over to someone else, be sure to check qualifications. Getting your business this far means you’ve done stuff right and you want to bring people in that can do the same. Ask everything you need to make sure they meet your standards. Bringing in a partner, on the other hand, is an entirely different topic. Since business partners often have the same power to make decisions, partners should be someone you can trust. The last thing you want is someone that you’ll end up in litigation with.
At the end of the day, everyone you bring aboard should be someone you can trust and leave the business to run itself. Nothing beats being hands-on, but having confidence in your team to run things smoothly without you once in a while is next to none. There’s a lot more that could be said but this is the one we believe is worth noting as a tip for small businesses.
Don’t grow too fast
This is probably one of the things you have to know to find out exactly how to avoid it. A lot of companies in the past have fallen into the pit of overreaching their growth and never coming back from it. A big mistake businesses often make when experiencing fast growth is overestimating their value. Being optimistic only benefits you as long as you have the numbers to back it up. This is a situation we’d want you not to have a first-hand experience in. So don’t take our word for it and see these 5 examples of businesses that went too big too fast from entrepreneur.com.
Probably the rule of thumb for this is never to forecast your sales on assumptions, especially if your sales never scaled that quickly before. People tend to invest in the equipment they think they’ll need later on without the numbers to support the investment which turns out to be a liability.
In essence, being organized is something you should be instilled with by now. It’s still worth noting that organizing your processes and system has different levels you can take that depends on a myriad of stuff. From the scale of your business to a variety of products, but in general, these should scale along with your business. This means knowing that at some point, you’ll need to upgrade from spreadsheets to management tools or software. This part really speaks for itself. Being organized does not always define or dictate success but it dictates your flow and daily processes.
Upgrade when necessary
Unlike management software, other investments are more costly and require more thought before you can actually go into it. Before you lease or buy office space for the new team you just hired, be sure you have scaled enough to actually sustain everything and still make a profit. Some business owners tend to get too deep into the numbers and underestimate the cost to sustain a large manufacturing facility of some sort. Be sure to have someone in your company that can analyze the numbers for you each time before deciding about an investment that could make or break your company.
Upgrading doesn’t always mean investing in office space and large spaces. A good step to take, if you haven’t already, is ramping up your online operations. Building a website or eCommerce site is always something that most small businesses have difficulty with. It’s a cheaper investment that will let you have a wider reach and will test your product’s appeal. If you don’t know how to yet, we have the basics of building your website here.
Since you know by now that backing your decisions up with numbers is always the smarter choice, some can’t really separate a forecast from pure optimism. Building your business up to that point is purely from hard work and time. Don’t let a surge of optimism keep you from seeing what is actually reachable and sustainable. A little optimism never hurt anyone, just be sure to keep everything in the right balance.