There are certain things every small businesses needs in order to succeed. I could make this list incredibly long but wanted to keep it to the essential items that have helped us succeed. Please note that in this article I am referencing a small service based business. Here are the 8 critical necessities for our small business to succeed.
Service based businesses rely heavily on people to succeed. In order to offer great service you need great people. However, don't just think about employees here because there are lots of different people that you will need in order to succeed.
Employees - You are going to need exceptional employees to succeed as a service based business. The reason that service based businesses are so hard to scale is because you are in the business of people. Finding and training good people is difficult. Additionally when employees leave your business (by choice or not) it can be disruptive to your business if you are not set up correctly.
Customers - The right customers are equally important to the success of your business. When you first start out you will work with just about anyone. However, you quickly learn that you should only work with the best customers for your service. Disqualifying customers and discarding bad customers is an important piece of scaling a service based business.
Network - Your business network is extremely important to your business. No matter what type of business you are having a strong business network around you is extremely beneficial.
Mentors - All small business owners need a good mentor. Mentors can be friends, family, business network colleagues, or professional coaches. Every business owner will face challenges where a mentor can weigh in with a different perspective.
When I was first growing my business I asked my dad for some help on finding new customers. He told me to start a blog and get involved with LinkedIn. I didn't like the idea of either of them. I was young and dumb and both of those avenues sounded dorky to me.
Reluctantly I started a blog roughly five years ago. Per my dad's warning it was slow and difficult in the beginning. I didn't know what I was doing, I'm not a writer I'm an accountant. However, I stuck with it and slowly grew a following.
Now our blog is one of our main sources of income. I think it was one of the most critical decisions I made that allowed us to succeed. Now our phone rings several times per week or day telling us they found us online. They found us through our blog our through a video on YouTube. Additionally we drive tons of inbound leads that reach out to us directly through our website.
Still not a believer? Ok let's talk some numbers then. Our blog has driven us more than 1/3 of our all-time income. Last year alone we drove over $100,000 of business to our website. Is a starting blog worth it? You betcha!
We start every new year with clear goals. Some of our goals are numbers oriented and some are not. We build a small business budget ever year in December. We then review our budget against our actual performance several times per month. This allows us to stay in tune with our goals and keep the business on track.
Additionally we build a forecast, which starts out the same as our budget. We modify the forecast or re-forecast the future each month based on our actual performance. This allows us to stay in tune with our actual performance and how that is going to affect the future.
Setting clear goals, building a budget, and forecasting the future is only possible if you have updated and accurate numbers so having a good bookkeeping system in place is essential.
Sales are the lifeblood of the business so keeping our pipeline full is crucial. Selling effectively in a service based business can be difficult because it is a never ending balancing act. You eventually hit capacity and you have two choices; stop selling and growing or continue selling and hire more help. The problem is you rarely need a full time person, nor can you afford them. However, you need to hire if you want to grow so you need to leap first.
Then issues like losing a customer or employee throw all sorts of problems into the sales process. If you lose a customer you are scrambling to replace them. If you lose an employee you often need to slow down the sales process until you find more help. Keeping a full pipeline allows you to be picky and only bring in the ideal customers at the right times.
I believe that process is the key to scaling a small business. While you can't scale without people, marketing, and sales all of those facets have a process to them. As you grow you realize how important detailed processes are to a scaling business. Need people? Then you need a hiring and training process. Need customers? Then you need a marketing and sales process.
Scaling a service based business is all about building a repeatable process as if you were doing it yourself. The problem is you can't do everything so you need to train others to do something the way you believe it should be done. A service based business needs to be able to operate without the involvement of the owner. Build your business with the mentality that you could drop dead tomorrow and your business would thrive and you will be on the right track.
Every business needs a vision. A vision is different than clear goals above because a vision is more big picture. What is the long-term goal of the business? Not just next month, next year or the next five years. In the grand scheme of things what is the purpose of the business? Every good business starts with the end in mind. Keep your eye on that long-term goal and make sure that every action is geared towards executing your vision.
It's weird that software made my list but I don't know where we would be without Hubspot. Hubspot has allowed us to develop and implement a marketing strategy.
What we really love about Hubspot is the automation and analytics. Hubspot allows us to always be marketing even when we are working on something else. Additionally the analytics behind the scenes make it clear what is working and what is not.
As a matter of fact, the software saves companies up to 250 hours per person a year. So, if you consider an employee who gets paid $25/hr, that's over $6000 year. Even if we considered opportunity cost for an employee. Say if a company charges $200/hr. for ops work completed by the same employee, that's over $50,000 in lost revenue. Incredible!
I could write an entire article on how Hubspot has helped our small business succeed; the bottom line is it just works for us.
Benefits Beyond Money
Being a small business we can't offer the same monetary compensation that some of our bigger competitors do. So we have to differentiate ourselves and attract top talent through other avenues. All of our employees agree; we don't work here for the money. We could all make much more money somewhere else.
A unique culture is important to the scalability of your business. Today's workforce has desires beyond money. They want a fun environment to work in. They have a desire to add value to society. They want to be proud of what they do. By empowering our employees to manage their own schedule and time we are able to provide them with a job they actually enjoy. They get flexibility not only in their day to day time, but how they manage their vacation time. Additionally they are empowered to work closely with our clients and make a difference by providing them with a financial tool that allows them to grow their business. Having a unique culture is incredibly important to your small business.
What things can't your small business do without?