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Starting, managing and growing a small business requires quite a bit of listening. Small business owners need to listen to customers, spot trends, solicit input from employees, and watch for regulatory and financial warning signs along the way to small business growth. Entrepreneurs without the ability to recognize these inputs and synthesize them into their strategic and day-do-day decision making often ultimately fail.
At the same time, there are times when it is important for small business owners to disregard inputs they hear from various sources. After all, there is a difference between detractors and non-believers versus those that are providing constructive feedback on how to make your small business more successful.
Here are three important scenarios where listening can be less helpful and more of a liability: (more…)
We all hear the common refrain regarding small business and startup finances: cash is king. As existing and aspiring entrepreneurs, we hear this so often simply because money can be so scarce during the early stages of a startup, as well as phases of high growth later in the startup’s lifecycle.
Just to add some tangible data to this discussion, I thought I would take a look at some preliminary results from our ongoing survey of small business owners. In the study, we are polling several hundred small businesses and startups to learn more about their risks, costs, profits, success factors, and a number of other variables. (Take the brief survey here and earn a chance to win a $250 American Express gift card).
Of the several dozen responses we have received so far, we found that each and every one of them – in other words, 100% of the businesses in the study – cited “managing cashflow” as a big concern and challenge for them. We suspect that this challenge may be at least partially amplified by the fact that credit is tighter for small businesses now than it was before the financial crisis of 2008. To add insult to injury, the US Small Business Administration (SBA) is cutting back on their government-backed loans in recent years as well.
So we wanted to hear what readers of our blog think: what sources of cash have you used to support your business, if any? Take the poll below and view the summary of results from other entrepreneurs.
In the meantime, we’ll dive into each of these sources of financing in more detail in a blog next week. Stay tuned. We’ll also cover this topic in our free online Small Business Boot Camp training course, so register or learn more here if you haven’t already.
Many entrepreneurs feel as though their survival hinges on landing a small business loan, whether it be an SBA loan or one from some other source. After all, most mainstream media and academics tend to claim that “running out of cash” is one of the leading causes of small business failure – if not the single biggest reason.
However, our hands-on experience with and research of small businesses suggest that cash is not the reason most businesses fail. Instead, cashflow issues are typically symptoms of deeper root causes. Much like person dies because their heart stops beating or they stop breathing, those are merely symptoms caused by some other disease or problem.
With this in mind, I tend to believe that cashflow issues are not what small businesses should be most focused on, especially in the early startup stages. Startups landing millions of dollars of capital are often glamorized in popular media such as Shark Tank, but in general, small businesses are often better off without outside capital.
Here are three reasons why small business loans can be a bad idea:
The Small Business Administration is one of the first resources that come to mind for many small business owners looking for guidance or help. And for good reason, since the promise of government-backed loans and free advice sounds like a pretty good deal.
Having run multiple startups and grown them to become multi-million dollar entities, however, I can tell you that the guidance provided by the SBA just barely scratches the surface of what business owners and entrepreneurs need to know to be successful. To add insult to injury, most small businesses are denied SBA loans, and according to data published earlier this month, the SBA is continuing to cut back on their government-backed loans to small businesses. In other words, the SBA means well, but the resources they provide leave much to be desired.
So how are small business owners and aspiring entrepreneurs like us supposed to carry on? The good news is that there is a wealth of information and lessons to be learned from entrepreneurs that have actually been in the trenches and run their own businesses. Below are five things that the SBA was never able to teach me, but are critical lessons for any entrepreneur: (more…)
As small business owners and entrepreneurs, finding practical and real-world advice can be very challenging. Especially when it comes to effectively managing small business growth, good advice from experienced entrepreneurs can be hard to come by.
We just released a new white paper that attempts to provide guidance, tips, and lessons to small business owners and startups looking to take their businesses to another level. In this paper, we cover a number of important topics, including:
- What to expect when starting and growing a small business
- How to find advice that the Small Business Administration and most small business training courses typically don’t provide
- PItfalls and lessons from actual entrepreneurs
- The most effective small business marketing tactics to increase growth and revenue
- Other effective growth strategies
As the optimistic, positive-thinking entrepreneur types, we typically like to think about the upside of being small business owners. However, there are often struggles and landmines along the way – and plenty of small business failures – that often get overlooked in our culture of glorifying the seemingly “nothing but success” stories of the Mark Zuckerbergs and Bill Gates of the world.
What many don’t realize, though, is that most entrepreneurs struggle immensely at some point along the way. Even for those that are fortunate enough to become successful, the entire journey can be a long grind. Despite this fact, most popular business publications, training courses, and Small Business Administration recommendations don’t prepare entrepreneurs and small business owners for the difficult scenarios to expect.
Based on my own challenges and failures – combined with what I’ve seen countless other entrepreneurs struggle with – small business owners make a number of common mistakes along the way. I certainly have, having unintentionally run one of my companies into the ground, only to recover and grow the company to heights that I had never seen before.
Below are several things that I learned in my rise, fall, and rise again cycle as an entrepreneur: (more…)
There’s a lot of buzz around social media, search engine optimization (SEO) marketing, and other technology-based marketing service providers. While technology has certainly expanded both the ability to reach more customers and target more specific groups, many marketing consultants get too myopic in their view of how marketing should work.
When I founded one of my startups in 2005, we were one of the few companies doing SEO small business marketing for the professional services industry. Fast forward nine years later, and most companies have an idea of how SEO works. If they don’t, there are literally thousands of one-man SEO consulting companies out there that can help make at least a minor improvement in your results for relatively cheap. In addition, there is a much broader understanding of how SEO works, even though it is constantly changing. All of this means that more people are good at SEO than they were even just yesterday – and that includes your competitors. (more…)
When starting a small business, choosing the right level of focus can make or break your chances of success. On one hand, you want to focus on a relatively narrow market as a way to minimize your marketing costs and develop a strong customer following. On the other hand, too narrow of a focus can result in lost opportunity and revenue, which can be especially troubling for cash strapped small businesses operating on a shoestring budget without access to small business loans.
For example, let’s suppose that you are opening a retail clothing outlet. There are a myriad of different ways you could focus your business: you could focus on one target market, such as millennial women, baby boomer men, or children. Or, you could focus on one product line: outerwear, shoes, business attire, or casual clothing. Or, you could pursue a combination. The strategies you do and don’t pursue will have a big impact on how successful your company becomes.
Clearly, finding the right level of focus is important to achieving your small business goals and success. Here are four things to keep in mind when determining the right level of focus for your small business: (more…)
For most small businesses, email marketing and social media are key parts of their marketing strategies. However, with the proliferation of small business software options in the marketplace, choosing the software that best aligns with your business strategy can be a tricky proposition.
While certainly not the only two options available, Constant Contact and Marketo are two of the leading email and small business marketing automation systems commonly used by small business owners and startups. Both provide features that allow business owners and entrepreneurs better communicate with their customers and prospects digitally – all while driving more top-line revenue growth and profits. In fact, according to a recent report from Pardot, 84% of small businesses are already using or planning to use some sort of marketing automation software.
Both software packages are good options for many small businesses, but they also have their distinct differences, strengths and weaknesses, depending on your needs. Below are a few observations we have seen among small businesses that have used each solution: (more…)
Running a small business has its share of challenges. Developing a marketable product or service, finding a marketing niche, and creating demand are just a few of the challenges that small business owners face. However, a good small business marketing plan is a good first step in overcoming these small business challenges.
But what exactly does it mean to “create a good marketing plan”? Obviously, it needs to be effective and fit within the constraints of your budget. But beyond that, creating a marketing plan can be like navigating a no man’s land.
Here are just a few tips to help create tactics that can make for an effective marketing plan for your small business: (more…)
In this brief video, we outline three important components of small business growth:
- Developing a viable product or service
- Marketing and selling that product or service
- Scaling a company to meet demand for that product or service
Unfortunately, too many small businesses and entrepreneurs struggle with the #3 component. (more…)
The world is full of great ideas. In particular, entrepreneurs are especially good at generating ideas to address some of the world’s most complex problems. Breakthrough products such as Apple’s iPhone, Tesla’s electric car, and Facebook are all examples of things that wouldn’t exist if it weren’t for small business innovation.
Further, the TV show Shark Tank, popular business journals, and small business consultants all love to talk about innovation. After all, it’s more exciting to talk about new, creative ideas than it is to discuss the nuts and bolts of running a business. We can also see and touch innovation, much more so than the intangible grunt work of managing a business. In other words, innovation is sexy.
So, if we assume that this is all true, then how in the world can innovation be overrated? Here’s the dirty, two-part secret about innovation: (more…)
The many small business owners and entrepreneurs I’ve worked with over the years have different reasons for being in business. Some are looking for aggressive small business growth to enable an exit strategy in the not-too-distant future. Others want to create a lifestyle business, allowing them to work independently without the hassles of employees or overly complex operations. Still others want to create an asset that they can pass on to their kids or grandchildren.
Since there are a multitude of reasons why entrepreneurs start businesses (I’ve only listed a handful of them above), there is no one-size-fits all strategy for managing growth. Academics, self-proclaimed small business experts, and even the US Small Business Administration often prescribe generic solutions that aren’t good fits for all organizations. These ill-advised strategies can often create more harm than good, much like fitting a square peg into a round hole. (more…)
I’ve founded, managed, and consulted to small businesses in all shapes and sizes over the years. One common item that entrepreneurs struggle with is how to maintain the same drive and sense of urgency that the entrepreneur and business owner has. After all, we poured blood, sweat and tears into our businesses and risked it all to pursue that dream, so surely our employees will share our same sense of focus and discipline as our business becomes more successful, right?
Unfortunately, that’s usually not the case. To add insult to injury, most small business training courses and Small Business Administration workshops won’t cover this important topic. Here are a few reasons why it’s not common to see 100% alignment between you as the entrepreneur and your employees: (more…)