I love the idea guy in the small business world. We all know them right? It's your buddy that is always coming up with a new hot idea. Often times these ideas are brought up over a beer at your local watering hole. Most of the time nothing comes of these ideas. However, sometimes businesses are formed from the crazy idea. The majority of the ideas flop as a business concept and fail. In fact according to Bloomberg 80% of entrepreneurs that start a new business fail within the first 18 months. I believe the main reason is that the idea guy often doesn't know anything about running a business, but figures he can do it anyway. Some ideas gain traction and actually become real businesses, but they are certainly the minority. So how can you turn your great idea into a successful business?
Admit What You Don't Know
One thing I often see with new business owners is they try and do too much. They try and save money by doing everything which is extremely unproductive and inefficient. You would be surprised how many things you delegate as you grow. I really think that a business owner is only really good at a few things and that is what they should focus on. Admit what you don't know, what you are not good at, or simply don't like and find someone better to handle those tasks.
Act Like a Real Business
Many new business owners don't grow up fast enough. They don't want to admit they are trying to be in business because they are so small when they first start out. They don't want to come off as some two bit operation. They tell their friends that it's just a hobby or something they are doing on the side. If you are going to turn your idea into a successful business you need to leap. Be proud that you are trying something new and let everyone know.
Develop an Organizational Chart
When you first start a business developing an organizational chart can seem useless because most likely your team is just you. It may seem like a waste of time but developing an organizational chart from the very beginning is incredibly important. This can help you form your vision of where you want the business to go. Put your name on every single position and then decide what your most immediate need is; that is your first hire. As you bring people into the organization replace your name with theirs and repeat that process up the organization chart.
Process is the key to scaling a business. Developing sound processes for your business is another thing that is often over looked or skipped completely. It can seem like a waste of time, when you first start out because it is not making you any money. Most entrepreneurs feel an urgency to make a sale when they first start out. While that is important there is no reason to sell something when you don't have a process to back it up.
You should develop a process for everything including hiring, firing, sales, marketing, general operations etc. Once you start developing detailed processes it seems like there is no end. Literally everything needs a process. When you have a detailed set of processes in place you are ready to scale.
Learn to Sell
If you can't sell your product or service you won't be in business very long. I repeat, if you can't sell you won't be in business very long. I feel this is the major roadblock for a lot of entrepreneurs. People are so passionate about their idea that they don't take the time to find out if the market even wants it. They assume everyone wants to buy from them. Sales are everything; they are the lifeblood of the business.
Measuring your results is important. I'm not even necessarily talking about just your financial results. You should definitely have something in place to measure your sales and marketing. Tools like Hubspot and Salesforce can be a great asset but not necessarily applicable to a small business. Even a simple spreadsheet can get the job done when you are small.
I do see a tendency for small businesses to "wing it" when it comes to their finances. All too often new business owners ignore their bookkeeping completely. Not having a bookkeeping system in place is like running your business blind. The very best favor you can do yourself is to keep up with your bookkeeping right from day one when you are very small. Consistent bookkeeping is a habit you will be glad you got yourself into as you grow and it is most likely one of the first tasks you will decide to outsource or delegate.
Successful entrepreneurs know how to pivot when they face challenges. Super successful entrepreneurs learn to anticipate change and pivot before they face challenges so they can stay ahead of the competition. It is important to stay relevant and remain a thought leader in your industry.
From a numbers perspective good financial reporting has really helped me pivot when necessary. Creating a budget and also a forecast for your business can really help you spot potential problems, but also opportunities. Many business owners finally get around to reviewing the previous months financial reports several weeks after the close of the month. People are obsessed with looking backwards, but fail to look forwards. Take your actual performance and use it to get a glimpse into the future. Do you like what you see? If not do something about it before it is too late.
Have you turned one of your crazy ideas into a successful business? What is some of your advice?