Tips for Growing Your Small Business

No matter if you are a tech startup or a family-run business, there are the same hurdles beyond the first round of funding or opening your doors for the first time. The Harvard Business Review has a great piece about the Five Stages of Small Business Growth, which are Existance, Survival, Success, Take-Off, and Resource Maturity.

From the HBR article: “In reaching this stage, the business has demonstrated that it is a workable business entity. It has enough customers and satisfies them sufficiently with its products or services to keep them. The key problem thus shifts from mere existence to the relationship between revenues and expenses.” In Existence mode, the owner is most often the operator as well. Keeping staffing low at the outset to minimize costs is vital. But a car can only run on as much fuel as will fit in the tank. To grow your business, you have to get a bigger tank. Here, we are assuming the Existence, and working on getting you from Existence to Survival and from Survival to Success, with some tips for small businesses to keep in mind as they grow.

-Hire a lawyer. When staffing is so low you are the CEO but also pack all the boxes for shipping, paying the fee of a lawyer can seem like a daunting prospect. But they are invaluable in business growth, filling out paperwork, protecting your assets and intellectual property, and often work as advisors that are great, safe sounding boards for your ideas. As soon as a company starts to appear as though it will garner success, it can become a target.

-Identify strengths. With a small staff, it is vitally important to know where the strengths and weaknesses of each participating individual lay. If you have a business partner but you’re both terrible with keeping track of bookkeeping, you need to know how to afford an accountant. If one of you has the sales skills to pitch the business, but the other has the nurturing to train loyal staff, that information needs to be discussed and clearly outlined upfront. Even if it is only you and one cashier or software developer on the whole team, set clear expectations of everyone involved, and don’t be afraid to draft paperwork that clearly outlines these expectations. Don’t sugarcoat things, either. Hurt feelings are not more important than your business.

-Remember balance, and develop leadership. Things need to get done, and you need to make sure they happen, even if that means doing them yourself. But burning out, or stretching too thin, leads to things falling through the cracks that can bring a young business crashing down. Hire people you trust and then trust them. Train them well. Have meetings with transparency. Have them help you develop training materials for new staff. Hold regular reviews. Give them actual responsibility and work to do and then go home and leave work at the door. Get some sleep.

-Create a succession plan. From day one, it is important to lay out how the exit strategy for closing, succession plan for death or retirement, and guidelines for how selling the business to a larger company is going to play out. What percentages go to whom? Who gets the business if you retire? What if you are hurt and cannot run the business? Who becomes the leader?
-Know who you are. You have to have a brand identity, core values, and an attitude towards business that is clearly laid-out and easy to communicate. You need your customers, your staff, your investors, your partners to know what makes your business unique and what is the heart of the business. Make sure the customers know your face, your employees believe in your ethos, and everyone is committed to the same business practices with a consistent and distinct voice.

-Manage growth responsibly. There’s a saying that every day, you should think about doing ten times that revenue the very next day. If you make 100 doughnuts, are you capable of making 1000 tomorrow? What staff, supplies, and equipment would you need to get from 100 to 1000 doughnuts a day? That’s not to say you should go out and spend money on all of those resources right now, because you may not have the ability to sell 1000 doughnuts and those ingredients would go to waste and the staff would drain you financially. But if you know exactly what it would take, every day, to grow ten times by tomorrow, you have a solid foundation for building over time to increase output.

-Build community around your business. How can you give back? This is as much about charity as it is belonging in your neighborhood. This is as applicable for digital companies as brick-and-mortar ones. Participate in events. Raise money for a good cause that relates to your business. Be nice to the deli on the corner your staff gets lunch from. Even Google changes the logo on holidays and notable dates to keep its users feeling like part of the family.

-Don’t take more money than you need. Tech companies in particular are using high valuations and large rounds of funding for free lunch every day and half-basketball courts in the office. This may make you appealing to talent, but if you sell your business for much less than the valuation, or you hit lean times, those who take less money to start out, and run leaner when they can, will make it through the rough patches without collapsing.