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50% of small businesses fail in the first five years. A stat that fuels my sleepless nights. Imagine half of all glittery-eyed would-be entrepreneurs and potentially game-changing ideas turning to dust, in five short years.
It's not because a business idea was bad - there’s something else at play here. Those businesses are where we as a person eat, meet friends, shop...These small (service) businesses are important to our lives. They support families, communities, and our economies. 60% of all private-sector jobs are created by small businesses. They’re 98% of ALL businesses.
So how do we increase the success rate of small business? Well, there are some lessons that I've learned, not just from running businesses myself, but from listening to the amazing entrepreneurs I get to talk to every day.
Businesses work by design, not by default - have a business plan for your small business
My first tip: Have. A. Business. Plan. And not just any old business plans. I’m talking about a document-you-never-close kind of business plan. It needs to be flexible and constantly evolving with your small business. Define even the smallest of details. It’s fine to change them later (in fact, that’s the point) but having a clear direction will make everyday decision-making simpler.
Fake it until you make is the saying. Implementing good habits from the start will set your business up for the smoothest path to success. Getting your processes in place, implementing a business structure, and acting like a ‘big business’ from day one will make scaling up a lot easier on you and your team, trust me, you’ll thank yourself later.
Write everything down. Have proper sign-off processes. Work smarter. Do better.
Listen and learn
Sure. Don’t action every piece of advice. But make use of the people around you as your business resources. Whether it’s a thought leader you reach out to, your customer base, or employees, think Jamie from Sales, it doesn’t matter. Ideas are ideas and they’re all worth considering.
Keep your team up to date on what’s going on on a larger scale inside your business. You cannot over-communicate. In fact, as Molly Graham (ex-Google, -Facebook, and general start-up wizard) states, “If you feel like a broken record, you’re doing it right.” In fact, what she says about communication within your business is so good you need to read it in full.
“Communicating context is a management superpower, particularly inside scaling companies. Most people are terrible at this. I have NEVER met a scaling company where people felt too informed or too clear on what is happening and why.
In fact, a typical sign of scaling is that your engagement scores on "I know how the work I do every day contributes to the goals of the company" go to shit.
The biggest mistake I see CEOs and managers make when talking to their team or the company is “starting in the middle of the sentence” — they communicate as if everyone already has the context. They assume people know why something is happening and only talk about what is happening.
Approach every conversation as if everyone is new (remember if you're growing rapidly, it's true: half your team is new all the time). Start the beginning of each meeting, presentation, etc: Why are we here? Why are we doing this? How does it connect? It may be boring to you, but you'll be surprised at what a difference it can make to the engagement and effectiveness of your team.”
At Futrli, we have monthly company updates, where each of our Chiefs and VPs get up and speak a little about what’s going on in their corner of the business, and we have our team submit anonymous questions in advance.
Regular 1:1s is imperative as well as team lead meetups. Transparency is key for us. We work hard to make sure that the entire business is on the same page. This is never a simple feat, of course, but we’re trying!
Bin great ideas (no, I’m not crazy)
Before you close the tab, let me explain. One of the things I see far too often is people clinging to their work. Let go of a sinking ship.
Stop calling your business “your baby”. It’ll stop you from making difficult decisions. Let it grow and let it change. I’d need a good few more fingers to count the number of potentially brilliant plans I’ve scrapped.
“That’s a fantastic idea for a blog post.”
“Does it actually benefit my brand?”
“Nope.” Then bin it.
If I put every good suggestion I’ve ever had into action, I wouldn’t be writing this, because I’d likely be out of business. Keep a note of good ideas, sure, but don’t mourn them if they don’t work out. You don’t have the time, resources, or mental capacity. Trust me. It’s the quickest route to burnout, for you and your business. Instead, concentrate on the really good ideas that align with your cause.
Give it your all
A business needs your commitment. And I’m not just talking money. If you take this as a sign to sell your house to fund your new cafe, I’m afraid you’ll have missed the point.
Sure, people run successful side hustles. But, a study by the Startup Genome showed that founders who don’t work full time have 4x less customer growth and end up raising 24x less money from investors. If you intend for it to grow and amass into your main income, your business needs to be your main focus.
Equally, however, you’ll need to sacrifice some of your power at times, too. Looking forward to a high-growth business future, you can’t expect to have eyes on everything. It will drive you crazy. After some deep breaths and some time, it might not even feel that bad.
Hire people you can trust. If you doubt the people in your team, you’ll find yourself either nervously peering over shoulders or taking on the entire role yourself. And in that situation, no one wins.
Live and breathe your message
Welcome to the 21st century, the age of being ‘authentic’. Customers hate being a number and want you to care about a whole lot more than just the paper in their pocket.
Brands taking a stand against issues; climate change, racism, animal welfare, whatever, are being widely praised. Those just trying to sell their products are being left, well, eating dust.
But it’s not just about the users of your services. Embodying your message will benefit you and your team, too. Whilst, after a really tough day, having a strong mission isn’t going to heal your frustration or fix any of your problems, it will provide a bit of comfort and fuel to start the following day.
That’s why we’re building the Hive. A community that doesn’t just support small businesses but one that lets them barter free time with advisors that they just couldn’t afford to employ in-house.
Turn the tables
People aren’t born with entrepreneur written in their genetic code. The defining characteristic of an entrepreneur isn’t being a suited and booted, coffee-drinking innovator you see on every #BusinessInspo Instagram.
No. The line that separates the successful entrepreneurs from the not-so-successful is merely knowing (or best-deciding) what to do with opportunities.
In the rare instance, when an opportunity just ‘falls’ into an entrepreneur’s lap, they’re defined by what they do with it.
How can you use this to your benefit? How can you spin a bad day into a good one? Every second is an opportunity, and a good entrepreneur has to know what to do with it.
Care for your business by caring for yourself as a person
You’ve got a lot on your plate, and you’re keeping a lot of things in line. But, who’s checking on you?
Your business is likely to be pretty reliant on you, so sickness and burnout definitely aren’t problems you want on the cards. Looking after yourself is looking after your business, in a roundabout way.
A simple example, for all my fellow caffeine connoisseurs: coffee makes you feel awake but, funnily enough, getting enough sleep is a much better cure (ground-breaking, I know).
Like I said previously, an entrepreneur knows how to make the best of every second. But that’s not always working away until the early hours, buried under a pile of paperwork. Sometimes, that means using that time to cook a healthy meal, relax with family and friends, or head to the gym. Sometimes the best work you can do is shut your laptop and relax, mindless, with a film.