The Uneasy Road to Independence: Advice From an Entrepreneur
As a business psychologist and entrepreneur, I am always interested in habits, processes, and individual characteristics of successful leaders.
The destination always looks glamorous, unburdened, and free, but the path is often not. After paying taxes, dealing with employee issues, and the bottom line, I sometimes get mentally and physically drained and wonder if it’s worth all the effort. But I keep going, forging my path toward my vision, always faithful the dots will connect and the plan will come together.
Considering all the hurdles and stresses that weigh on the body and mind, it is easy to understand why so many small businesses don’t survive their first few years. Most of us have thought how much easier it would be to just go and get a job.
So what keeps those that thrive going? What oils their engine and helps them to start producing results sooner than others? I’m convinced that what sustains the small business owner and sets people apart is passion. Yes, you simply have to love what you’re doing enough to want to keep keeping investing more effort and time, despite the drawbacks. Personally, I am passionate about running a business, being creative, and leading people in growth. I am passionate about helping people develop to reach their potential and provide for their families.
However, passion alone won’t cut it. Faith, cash flow, and hard work are other key driving elements that sustain the business and keep the owner sane in the face of all the obstacles. Successful businesses continue even through uncertain conditions, strategizing intelligently and believing that somewhere down the line, the dots will connect and the last pieces of the jigsaw will fall into place.
If you think profits will start rolling in as soon as you’ve set up your business, you’ll probably be shocked at the struggles that you will have to endure.
When I started my business, Daily Posts, I thought clients would flock to us. The truth is that we have grown really well through word of mouth, but it has taken a while to sustain a steady stream of customers through our website. It’s taken a lot of iterative improvements over the last three years to get to the position where our technology is sound, our processes are robust, and our team is strong and reliable. Profits had to be reinvested over the first two years.
Many business experts recommend you have six months business operating cost and six months of life expenses before you consider leaving a day job. This is important, but even having this financial safety net doesn’t shield you from the pressure.
I can vividly remember the first few months after leaving paid employment; I had a look at my finances one day and the savings had been depleted by 40 percent! It took a lot of mental strength and some encouragement from my family to keep me from breaking down that day. My lovely wife found some humor in the chaos as she closed her eyes and said: “I am trying to picture you, hat in hand and tail between your legs, as you run back to your office—you look absolutely ridiculous!” We laughed over it, talked a fair bit about strategies, reminded ourselves why we needed to keep going, and by the next morning I was focused on growth again.
A financial cushion goes a long way to combat the pressures. I shudder to think what would have happened if I didn’t have that 40 percent to burn through! Life as a small business owner is tough, so you need to have stability. If you don’t, the pressure will kill your cash flow, your mentality, and, ultimately, your dream.
Financial stability and planning
As I have mentioned above, having an income to sustain you while you push the business to grow is invaluable.
In my case, it was past savings, but it could also come in the form of passive income, or your spouse supporting the family until the business solidifies and can start making profits. If that is not likely, think about seeking out a reliable, good-natured but business-savvy financial partner to help inject some funds into the business until it can support itself and you.
I pointed out earlier that passion and hard work are the oil that keep the wheels rolling during the difficult phases of starting a small business—but the biggest challenge small businesses generally face is a cash flow crisis.
Brendan Wilde of Free Parking NZ, a leading tech company in New Zealand and Australia, sums it up perfectly for me when he said: “Financial constraints in running small businesses could, in the long run, water down the determination and passion that once drove the business. If the leader stops believing in the business, how can the customers gain the confidence to buy?”
Work-life balance and setting your hours
Although I always make an effort to separate business from personal life, it is not always easy, as business and family become intricately entwined. So I let it be, while ensuring the finances are kept apart through ordered accounting principles.
That aside, I discovered it’s important to involve and gain the support and understanding of my immediate family. If yours has a close relationship, you will find that family support can be vital when trying to set up or steady the ship of a small business. They can provide you with emotional support and important feedback as you develop a new self as a business leader and strategist.
As a business owner, I found that I had to invest more time in the business than when I worked for other people. This means that instead of an eight hour workday, I spend an average of 11 hours every day focused on the business.
That is a huge steal from family time, and understandably, it put a strain on my spouse and kids in the early days. My kids have instrument recitals, gymnastics competitions, acting performances, and a lot more. I used to be able to go to everything, but when I started my business, weekday commitments and workload meant it was tougher to be there every time. I made sure the kids understood that I would always be there if I could.
Things are a lot better than they were in the early days of starting the business. I have a staff I can count on now, and my family appreciates that I am building a better future. They are enjoying some of the rewards and get more “daddy time,” and so are starting to see the benefits.
If you’d like to read more about achieving work-life balance, check out this article next.
Planning and daily activities
From the outside, when people think of managing a small business, they imagine making sales, paying taxes, and covering costs for the purchase of business equipment, rent, and so on.
But, there are many other daily essentials to consider too. I have to:
- Keep a good record of everyday processes
- Replace old stock with new, quality, in-demand products
- Pay creditors and other compulsory bills, and plan cash flow
- Create marketing and strategic branding campaigns, determining and using the most effective platforms, tools, and channels
- Follow up with clients and get feedback for improvement
- Effectively and productively manage money, people, and time
A business owner must make sure they follow some core and effective principles of day-to-day business management. They include:
- Setting standard work hours for everyone and sticking to them whenever possible—otherwise, you stand the risk of losing customers (this is not to discourage flexibility with work schedules, but specified work hours eliminate unplanned downtimes)
- Creating a checklist of to-dos and goals for each business day, month, quarter, and year and ticking them off as they are executed
- Creating efficiency by reducing distractions in daily business life, whether they are from social media, checking emails every five minutes, unwanted telephone calls, or anything out of the ordinary—think productivity, and don’t become a busy fool
- Using technology to enhance your business—get the right tech in place for your business processes, then integrate it into your daily activities to make you more flexible, adaptable, accessible, and productive
Protecting your business
Then, of course, remember to protect business assets, as insurance can be the single most important factor in whether the firm survives or capitulates in the event of a major crisis.
A business owner should take the full complement of business insurance policies relevant to their activities. These may include:
- Liability insurance to protect the business against lawsuits
- Fire and theft insurance to protect the business property (if it owns the business space)
- Worker’s compensation insurance as a safety net for employee accidents
- Keyman insurance (life insurance on the key person in the business) to minimize the risk of losing the input of key employees
As a rule, businesses don’t succeed on luck. They are a reflection of the vision and passion of the business leadership and the processes that are put in place to create the daily roadmap toward the company mission.
Enjoy the process, live with passion, and carry people along with you for the ride.