Talking about starting a small business obviously has its challenges, but challenges may not be a strong enough word to describe what lies ahead when starting and continue to run a small business! You need to have the funds and finance plan to make it all work. Understand your business model inside and out to know what to expect. Be prepared to do whatever it takes to get the job done mentally and physically and know when to ask for help!
While you might be ready to quit your day job and start your dream of owning and running your own business, there are quite a few hoops to jump through first. One that most people find the most difficult is financing. Two former employees of mine dreamed of owning a small business, and we often talked about their dream. They told me the biggest reason they never pursued it was because they have so much debt?! I told them that should not stop them. In fact having debt as long as it is good debt should help them in getting financing. They were quite perplexed, how would a bank or finance institution give them a loan when they felt like they had more debt than they should have to start a business. I told them that the bank looks at how you plan on using the money and what kind of return they can get and whether or not the business plan seems sound. There is a lot more to consider than just your personal debt to income ratio, for starters this loan is to help your business start and make money to repay the loan.
Financing for our small businesses came from working for other companies and earning stock options and then also having a relative pass away unexpectedly and giving us a small inheritance. Both of these things happened around the same time and gave us just enough funds to be able to put a down payment on the two business we own and operate today. The normal down payment for the loan is 20%. It never hurts to have a good relationship with your banker! We did have a failed business as well. Two out of three isn’t bad! One of our successful businesses absorbed the bad debt associated with the failed business, and while it has been a struggle, we make it work each month, one day at a time!
There are others around the world who have no credit nor the means to fund their business through their personal funds. Banks are reluctant to pay, and their option is one of three: either start off very slowly and build up a business from the ground with never having to take a loan, build a credit score so banks and credit card companies will not be reluctant to fund you, or browse through online lender reviews trying to find a finance company that will match your individual situation.
Every since year during the ‘slow season’, which is the summer months for my business, I feel like a complete and utter failure and wonder if we will make it to the next month or close. I have felt it every year since we opened and somehow we have pulled through every summer. Our slow season drops our sales over 60% from our normal business months. Learning when your business will be ‘HOT’ and when it will be “NOT’ is a huge learning curve. According to Forbes.com 8 out of 10 small businesses do not make it past 18 months! If your company makes is through the first year you may start to see trends, depending on the holidays, weather, and other outside determinants that are completely out of your control. I know weather has a HUGE impact on my business, if the weather is nice customers prefer to be outside enjoying it, however on the flip side if it terrible weather, customers also prefer to stay home! The weather has to be just crappy enough that you won’t stay home, but that you do not want to be outside either!
When you have a manager looking over your shoulder it is easier to stay on target and get things done. You know you are accountable to someone, but when you are your own boss how are you at being accountable to yourself? Making yourself stick to getting things done. One great way is LISTS, lots of lists! List for things that need to be done daily, weekly, monthly, quarterly, and annually. I have several different list methods I use to keep on track. While I will be honest things still do fall through the cracks! I try and keep that to a minimum. I have reminders in my phone that will tell me when I have something I need to get at the store for my business.
We use OurGroceries app to track all of our needed purchases for personal and businesses. This app allows us to share lists and swipe off items as we purchase them. I have a planner that keeps track of scheduling events and staff availability. I use email to keep track of things that need to be done that were communicated from customers or employees and after I have read them email I mark it as unread as a little reminder that I still have an action item that needs to be completed in reference to this email. I also use an excel spreadsheet in OneDrive that I can access and make changes online to keep track of the schedule as a whole for the business events. Then of course when staff needs things they will email, leave me little notes on the bar counter, or text.
Being able to be the boss and handle all the things thrown at you can be a bit challenge. Especially if running your own business is the first time you have ever managed people. While having great employees is every business owners dream, even great employees can cause you mental anguish from time to time. You will learn about your employees and their personal lives and being able to talk to them without internalizing their problems and making them your own is a challenge. While you can offer advice on how they can work on personal challenges, you need to remember that is isn’t your job to solve your employee’s life problems. Working with almost all women we talk a lot and try to help one another, but as the boss you have to make sure they know you are not going to bend business rules because of their life challenges. You stand to get burned if you do. Do not give more to one employee that you wouldn’t be willing to do for another and never give more than you are willing to lose.
I have given a pay advance to an employee only to have them quit and never come back and never repay the pay advance. Luckily it was only $300, but when you lose an employee and you are out that cash, it hurts twice as much. Have a support group of like entrepreneurs that you can talk to when you come across challenges; many other entrepreneurs are willing to share their experiences.
Growing your own business many people will offer you unsolicited advice and one will be to let go! Allow your employees to do their jobs. If you micromanage you stand to lose some of your better employees. If you manage from too far of a distance the quality of your business could suffer as well, so there is a happy medium that you have to find. Trying to do everything yourself will wear on you quickly, while you do not want to pay employees to do something you could do yourself, you have to know when to cut yourself off and allow someone to help you get the job done.
Being owners of small businesses comes with its daily challenges, and the key is to take it all in stride and deal one day at a time with the long term picture always on your mind. Not letting upset employees or customers get you down, because for every one upset customer you probably have 50 happy customers, but happy customers do not go out of their way to let you know your services were good and that they were satisfied with their experience. Focus on the good! While some days will be more challenging than others running your own business can give you more back than your previous 9-5.