Small Business

Small Business

Entrepreneurs. Small Business Owners. SoHo (Small office/Home office). These are words that happen in my world every day. I love owning my own business and therefore being in control of my destiny. I am the boss. I call the shots. If I don’t want to work today, I don’t have to.

Whew – now that all of the lying, exaggeration, and pure B.S. is out of the way…here is what to expect. As an entrepreneur, everything is yours. Even if you have help, you will still share in every success and in every failure. If you cannot deliver to a client on time, it is your fault. If you just captured that account that will finally make you break even this year, that is your success. If your company needs additional funding to make it to the next step, you either have to find it or fund it yourself. Of course it would be ideal to have a money finder at your disposal, a crack team of sales people, an amazing staff of admin help, and an accounting department that never missed a billing, and kept track of every penny and reported it accurately and on time as well...

Well, nice idea, but if you are just getting started, this is unlikely. You will do most of those tasks at first. As a business owner, you should have a few things under your belt as far as knowledge of starting your small business goes.

Business Start Up Checklist.

  1. Make sure you have enough cash (or income) in order to make it through the planning phase of your company – Realize that the company may fail because it is not feasible in concept or product. If this is the case, you want to KNOW that as soon as possible so you don’t waste time or money (oh wait are those the same things? – as an Entrepreneur, DEFINITELY).
  2. Look for anyone already doing exactly what you are planning. You want to find any models that they are using to ensure success. How are they getting clients, what computer programs are they using, etc? Make as complete a model (on paper) as possible of their business – them you can work on improving it, not inventing the wheel again. NOTE: If no one is doing what you are planning, find a business that is similar in as many ways as possible. Then model that company.
  3. Do some informal testing if possible. Find out where people “hang out” who would be clients. Talk to them about the product as if it will exist and try to find out what they would pay for something like that. If the product is already in existence and you have a value add that you think they will want, ask them direct questions about it. Like, “Is it important to you to have your service people wear white shoes”, etc.
  4. Start your business plan. There are plenty of websites out there that tell you how to write a business plan, but the basic necessary parts of a personal business plan are:
    • A. Executive Summary
    • B. Management and Operations
    • C. Marketing
    • D. Finances
    • E. Advertising and PR
    I say personal because you need to get these things straight in your head before you embark on the journey. Once it begins, it is very hard to see through the fog. Although the plan will change, it will still act as a strong set of fog lights to light the way to get you through the start-up phase. Once the business is underway, it is very hard to step outside and see what is obviously wrong. Most people will continue trying to push the wrong peg through the wrong hole, all the while missing all of the other holes and all of the other pegs that are within reach and available.
  5. Make sure you have the financing and the tools needed for your success. Plan well here. If you miss this, you could find yourself losing your house and your business at the same time, which could leave you with no options except flipping burgers and living out of a box.
  6. Start small if possible. Register names, domain names, business licenses, etc. Make sure you have everything covered here without creating extra work for yourself in the future (like having to create State Sales tax returns with zero balances for the next two years while you develop the product). Keep your staff to a minimum. Keep all recurring costs to a minimum. In this phase “Time=$$$ means that the more you have left, the more you will have left”.
  7. Add cost only just before it is needed. This is the exhausting part of growing a business. You don’t want to fire the person you just hired, and you don’t want to hire early or late. This usually means that you stress out someone in the organization before the hire takes place. That person usually is you. You have to run a job and a half for a while before the need is clearly defined enough to hire.
  8. When hiring, hire for talent. Your people should be extremely good at what it is that the business needs overall. However, hire your people with very specific job descriptions and very specific expectations on both sides. This will save you tons of frustration in the professional lives of both of you. If you ever think you need to fire someone, do it sooner – way sooner than later. Bad things happen when the wrong person stays too long.

General Business Guidelines.

  • Don’t take equity partners early on. This is a viable exit strategy, not a very good entrance strategy.
  • Bootstrap (go cheap) whenever possible – but not at the expense of success – think balance here
  • Don’t enter into long term relationships (contracts) unless ABSOLUTELY NECESSARY.
  • Get good legal in whatever form you can, Get good accounting in whatever form you can – DO THIS EARLY.
  • Find vendor companies and people who have a vested interest in your success. If they need you to be successful to pay there bills, and they have a way to help with that success, then they are more likely to help you get there.
  • Find good vendors, employees, etc.
  • Try to remember back to the schoolyard, picking teams for basketball. There are two types of captains…The one who picks the best people, and the one who picks the team because of friends, or feeling sorry for people (wants to make a loser successful). In business, the second captain is a noble one, but will fail. The first will succeed. After you are successful, you can find a charity to work with in order to be philanthropic. DON’T hire out of pity or potential. Only out of proven success and talent.

From the Diary:

I (Mickey Smith, President and co-owner of Primary Hub) am an entrepreneur who has had to grow a company through one of the worst of times. I started a tech company just before the investment money left the tech sector. It was a time known as the “Dot Bomb”. Primary Hub was founded in October of 1999 and the sector investment money was gone by March of 2000 (count the months on your hands). We hired 28 people, and blew through just over $1 million before we realized we needed to change our focus, and drop our expenses and beef up our service.

I found out that our staff could produce twice the work at half the staff (that is a four times increase in productivity). I then let the sales staff go. We had a bad compensation model that required a heavy amount of management. I found out that I could outsell the eight people I had selling two to one. That represents a sixteen times increase of the sales output per person.

The next business disaster came with 9/11 and the no phone calls for two weeks, and no sales for a month that followed. At the same time, we ran out of cash on hand a month earlier. We were living sale to sale. I had to drop the staff again. We dropped the staff down to three people and hired a specialist to take the load off of our director of technology. We had to move. We no longer needed 3400 sq ft of office space. We had to settle the three-year lease and move into 1200 sq ft around the corner.

On the good news front, we found out that our client base had grown to consider us very good for their businesses, and that almost two-thirds considered us vital to their success... ahhh, something that we could leverage. We spent the next two years surviving on word-of-mouth advertising…we did NOTHING else as far as marketing. From that foothold, we built a company that grows every day. The staff that we have built (every position vital and necessary) is very good. Each person is excellent at what they do, and they grow in their talent and knowledge all the time.

Primary Hub is built on the success of our client base, and we can help them be successful. That is the ideal. We don’t make money as a share of what they make, but rather just charge for the labor that we provide. This is different from other companies in our niche. We therefore don’t end up overcharging, and we can help our clients navigate their issues while they build their businesses. As a web company that specializes in small businesses, we are also unique. Most companies won’t touch websites under $3000 we thrive in this arena. We have the ability to finance, so we can help to ensure the probability of the success of our client base. We have seen hundreds of web sales models, and we know what has a high probability of success. We also know how the search engines work, and how to get people ranked.

If you need web services for your company or startup, the experts at Primary Hub have been through it. We would love to help you on your way toward your success. We have expertise in online software and ecommerce, web design, web marketing and PR, search engine marketing, and website maintenance.

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