How do you measure the success of your small business?
Before we go any further, let me point out that I am talking about what I consider to be your ‘average, everyday’ businesses. In other words, not start-ups funded by VCs that are looking for an exit that occurs when a giant tech firm buys them. I mean your everyday entrepreneur – the restaurant or retail store in the downtown area, the small engine repair company, the manufacturing company that is thrilled to have been in business for 2+ generations. The business that you started by bootstrapping, putting your house on the line, getting an SBA loan. The business that you bought from the founder because you saw the potential for long-term success.
That business.
The most obvious measure of a successful business like that is that it can be sustained after you (the owner, founder, CEO, etc.) are no longer there. That might mean that you are selling the business to another business owner or your employees. Or maybe you’re passing it down to the next generation.
Either way, the business is able to function without you.
That’s the sustainable we’re talking about here. (Not sustainability meaning living in harmony with the natural environment.)
So one true measure that you have succeeded as a business owner is that your business has value and can be sold or passed on when you are ready to retire and move onto the next thing. Now the actual selling of the business is a lot more complex and I will leave it to the experts on how to do that.
Instead, let’s focus our time here on how create a successful (and sustainable) business.
Mission and Vision
When you are the founder of your business then you are its #1 Fan and Supporter. You are motivated to work hard to make it succeed and proud of your successes.
When you are an employee or freelancer working for someone else’s business, you are likely not the #1 Fan of the business, or perhaps not even the #2 fan. You may be happy to work for the business, but your ties are not as direct as they are when you are the founder – or even the owner of a business that was founded by others.
This is where having a mission and vision can come in handy. It may not seem necessary to prepare something that seems so ‘formal’ for your own small business, but it becomes more important with each employee you add. They need to know why they’re there, what they’re working toward, what matters to the business and where the business is heading.
If your support team is supporting you solely because you’re a great person, that certainly says a lot about you as a boss. But it doesn’t make your company sustainable if they only want to work for YOU but not necessarily for your company.
Separate yourself from the business a bit, and make clear to your employees, vendors and customers what your true mission really is, and where you see the company heading in the future (your vision).
Not sure how to get started? Check out this great guide from Hubspot on creating mission and vision statements. Or look for mission and vision statements on the websites of your customers, competitors, or suppliers to get a feel for what their mission statements say.
Delegation and Automation
So many of the small business owners I work with are SUPER busy and struggle to get everything done. Typically, as a business grows it’s easy to hire more help to support your customer base – so more people to clean if you run a cleaning service, more people in the shop if you have a machine shop, and so forth.
But it’s much harder to bring on “overhead” people. This includes people to help with finances, payroll, marketing, and all of the other tasks that you have been handling yourself since the start. Not only is it hard to give up control of these tasks, but also when you bring on these people, their salaries (or fees if outsourced) immediately diminish your profitability. There is less money left in the business after you hire them. They don’t immediately contribute to your revenue, but they do add to your expenses.
That combination of giving up control and giving up profits can make it very difficult to hire support staff, even when (or especially when) you need the help. There was a great discussion of this situation on a recent episode of the 21 Hats Podcast, called “You’re in the Valley of Death” that explains the situation quite well.
Rather than hiring or outsourcing, can you find a way to set up automated processes that help you save time? This could be as simple as setting up macros in Excel for any series of processes you do regularly. Or as complex as setting up a CRM (customer relationship management) software tool or email tool to automate outreach. You could use a tool like ChatGPT to help with brainstorming ideas or to create a draft of your marketing content. Check out these links (here and here) for some additional automation suggestions.
Accountability
Sure, you’re thinking. Those are all great ideas, but if I already don’t have time, how in the world will I magically find time to delegate or automate some of what I do? It’s just not that simple. Either path involves a lot of up front work to finally get things moved off my plate.
You are right! But ultimately, it’s worth it to leave you with a little bit of empty plate that you can use for more important tasks.
Think about what you’re currently earning as a business owner – and what you would pay someone to perform some more mundane or repetitive tasks that are currently your responsibility. That might be enough of a calculation to motivate you to look into delegating or outsourcing. Or check out this “What is your time really worth to you?” calculator for more.
If you turned those tasks over, then in theory you would be able to focus that extra time on higher paid (and therefore higher revenue) tasks. And that’s our goal – to make the most productive use of your time. But I know it is often way easier said than done. And by that, I mean both the act of turning things over to others (or automation) – AND the act of spending your time on “high revenue” or future-focused tasks.
So how do you get things the important (but sometimes complex) tasks done? Based on my experience working with small businesses for nearly 20 years, I have found that accountability is the most successful way to get things done. According to an Inc. article by an executive coach, just participating in an accountability group of your peers can lead to improved goal-setting skills, enhanced problem solving skills, increased motivation and increased confidence, among other things.
Building Value Internally
Okay, you say. I will try to delegate and automate. And I will plan to join an accountability group to get more stuff done. But what stuff? What tasks are the ones I should be focused on as a business owner who wants to build up value in my business so it can be sustainable?
Let’s start by looking inside your organization. Look for opportunities to delegate some of your tasks to other staff members. Find options to outsource the tasks that you just don’t like to do – or aren’t very good at. Seek out software that will speed up processes that get done regularly. In other words, start by delegating and automating.
Now consider the “hit by a bus” scenario. If you – or any of your employees – were to be, say, hit by a bus – and therefore unable to show up to work or answer any questions for a long time, what would happen to your business? What areas would come to a screaming halt?
Work on addressing those areas. Consider some cross-training so there is more than one person who can perform each vital skill in your business. And documentation of processes go a long way as well.
Use an accountability group to help hold you responsible for getting these tasks done – and making your business even more sustainable and valuable.
Building Value Externally
Now let’s look externally. If your top customer vanished, what would that do to your business? How dependent are you on one customer? Or one supplier or vendor or contractor? The first step to building value is to limit your dependence a bit.
That means looking for new opportunities on an ongoing basis. And protecting yourself from new threats – like competitors offering new products or services, huge shifts in technology that impact your customers, regulatory changes, and others.
According to a recent Inc. article: “A leader that does not invest in the future has no future.”
Let’s make sure your business has a future!
Start by reaching out to customers and suppliers more regularly than you do now – just for a ‘chat’. No sales – find out what’s on their mind, what keeps them up at night, what they’re excited about, anything that might help you see ways to better support them.
Continue on that path of external evaluation by setting aside time regularly to look for changes on the horizon that could have an impact on you. A PESTLE Analysis is a great way to do that and an important step in building value by protecting your business externally.
McKinsey & Co shared their “Ten rules of growth” in an article from August of 2022 that I think has some great tips in it. For example, “Prioritize profitable, fast-growing markets.” (me putting my market research hat on: Ask me how to find these markets!) Another tip is “Don’t be a laggard: It’s not enough to go with the flow – you need to outgrow your peers”.
How do you find time to keep looking for opportunity? An accountability group! Make it a habit to focus on growth – and find some peers to hold you to it!
Where do I find an accountability group?
‘This all sounds great, Kelly’, you may be saying. ‘But how do I find the time from my busy schedule to find an accountability group that will help me find more time in my busy schedule?’ Great question! And the good news is that I am facilitating an online accountability group program called Your ROI Club. I have just launched with my charter members but will be expanding the program at the start of 2024. Interested in learning more? I am starting a waiting list for those interested in launching for January. Add your name to the list and you’ll be working toward a sustainable business in no time!