I’m celebrating my 10th year in business this week. It’s hard to fathom how much I have learned and grown in the first decade of my entrepreneurial journey. I’m still striving towards financial success befitting of the above photograph. It’s good to think big…
I remember the hope and enthusiasm that I felt when I filed my papers at the Secretary of State’s office in Hartford, Connecticut. Initial start up costs included the $85 fee to apply for a limited liability company (LLC) business entity status. I happily wrote that check. The paperwork approval arrived one week letter. I was officially in business for myself.
I quickly learned that starting and running your own business is not as easy as it looks or sounds. There were so many things that I did not know. I became a student all over again. My learning curve was steep, and I made plenty of mistakes along the way. But then mistakes are often our very best teachers, are they not?
There are hundreds of people that I have to thank for helping me build a successful business. It’s the best job that I’ve ever had. I wish more people would take the leap of faith to become an entrepreneur.
To mark this special occasion and to give back what I can, I want to share the top three lessons that I’ve learned in managing a small business. (By the by, I dislike the term “small business.” Perhaps small is the new big?)
What does it take to be successful as a small business owner?
1. You can’t do it alone. You must build your “success team”
They say that the enemy of entrepreneurship is loneliness. I say it’s the misguided sense that you have to do everything yourself out of the fear (real or imagined) of lack of money. During the first few years, I was very cautious about spending money on my business. I tried to do everything myself, including the bookkeeping (disaster!), product development, design/branding, etc. Having a marketing background, I figured that I knew most of this stuff and could manage well enough. But there were clearly things that: a) I didn’t do well; b) I didn’t like to do; and c) I had no business doing myself!
After a few years of struggling alone, I figured out that I needed to build my own success team. Initially, without hiring employees, I was able to get the resources that I needed to grow my business. I now happily pay trusted experts to help me with my business growth.
Who’s on my success team? I have a Virtual Assistant, a bookkeeper, an Accountant, a web master, a branding architect, multiple graphic designers, a fabulous copywriter, a reliable editor/proof reader, a go-to photographer, an image consultant, several strategic partners, and, last but not least, a business coach! Without these experts, my success would be slow going and limited. I am extremely indebted to my success team!
Now for lesson number two…
2. Know your numbers
I believe that business owners should never outsource the financial part of running a business. It is like getting behind the wheel of a car and not knowing how to drive. You can never have financial independence unless you know the numbers of your own enterprise.
For the first 2 years of running my business, I’m embarrassed to say that my focus was getting checks in the mail. It was a good day if I found checks from clients in my daily walk to the mail box. Then I discovered the correlation between invoicing and receiving checks. My philosophy became “bill and you shall receive.”
At the height of my financial naiveté, I went to my Accountant at the of end the year and asked her, “Janet, did I make any money this year?” Really – I did this. Perhaps you have too? I did not even know if the business was profitable or not. Crazy, isn’t it?
Today, with the help of my business coach, my focus is on meeting my monthly optimistic number and new business development. I know the value of having a healthy pipeline of future business possibilities. My business coach helps me hold myself accountable for tracking my numbers and meeting my monthly goals. It’s a great discipline. As a result, last year, I had my best year ever!
Now on to business lesson number three – the one that I’m still working on….
3. Choose your clients carefully
As a business owner, you must know who your right fit/good fit/perfect fit clients are. And you must also be able to quickly identify who might be wrong fit/poor fit/horrible fit clients for you. Why? Because not every piece of new business nor every new client is good for you or your business. Don’t be seduced by the money. Be strategic and choose who you want to work with. Consider turning down new business that doesn’t “fit” your model.
The right kind of clients will build you up. They will make you feel great. They will value your services and pay you on time and full fee. They will trust you and play full out, holding nothing back. Working with them will bring joy to your life. You will form a strong relationship with them that will most likely last beyond the business engagement.
Working with the wrong kind of clients will suck the life right out of you. You will be exhausted and drained. From a spiritual point of view, the wrong kind of client will be wholly unprofitable for you. The aggravation level will always be higher than the banking benefit. Most likely, they will be unhappy with your products/services, no matter what you do for them. They will want special discounts and they’ll pay you late. Rarely will they refer new business to you, and if they do, it’s likely to be people just like them.
Working with wrong-fit clients results in great lessons. I try to remind myself that they are not bad people, just the wrong fit for me. They could be a perfect fit client for someone else. So it’s best to let them go to find their right fit.
Listen to your gut. If you find yourself hoping that they don’t accept your proposal, then this may be a “poor fit” sign. Do yourself and your business a favor and politely decline or withdraw from consideration.
Over time, you will come to clarity about what makes a perfect fit client for you. You will fine tune your market attraction strategy to seek out these ideal clients. And still, you will need to be choosy about which clients you work with. After all, this is your business and your brand. And most of all, this is your life.
Are you ready to leave your corporate job to start your own business? Before you quit your job, watch this video segment in which I appeared as the guest on The Hour with host Jim Pellegrino. This interview was taken in the Spring of 2012, six months after I completed my cancer treatment, so my hair was just starting to grow back.
In this interview, I share the 3 essential elements that you need to become a successful entrepreneur:
- Temperament: spirit of innovation; stomach for uncertainty; willingness to risk failure; business savvy.
- A plan: a business plan (how you’ll make money), a marketing plan (how you’ll go-to-market), and an exit strategy (how you’ll cash out and move on).
- Resources: money, personal savings, access to capital, people, connections, and support.
- Subscribe to my YouTube Channel