Being an entrepreneur is tough. The hardest part is that you’ll fail ten times for every success, so let me tell you the 3 most important things you should aim to always get right. Always.
1. Cash flow and customer dependencies
It’s hard to work on the business when you are in the business, but you have to. Many small businesses tend to rely on a small group of customers for revenue generation. But if your critical customers stop making purchases or, worse yet, default on their payments, you can quickly find yourself in dire straits.
In order to avoid potentially fatal cash flow issues, you should always be working to diversify your customer base. To do this you should always be networking, staying in touch with existing loyal customers, meeting new potential customers, marketing, and staying on top of all your social media. Dedicate 15% of your time to this, all year round. Keep the personal touch, and keep it positive. And be real.
It’s also good for small business owners to perform credit checks before onboarding new customers. Monitor customers’ credit risks throughout their lifetime and apply a 50% payment upfront if you can.
Do you find it difficult to give control to others? You are much more than your business, so separate yourself, otherwise the slightest perception of loss of control can provoke a “fight or flight reaction” in you.
I have seen small business owners have severe levels of fatigue and burnout, and foster poor decision making skills due to overinvolvement. You have to delegate, and trust the experts to do their thing. Give them a goal, budget, and timeline, and get out of their way. The surest way for you to damage yourself is to refuse to learn how, and when, and to whom to delegate work.
3. Strong reliance on contingent and part-time workers
Small businesses frequently find challenges in recruiting and hiring employees as they tend to face strong competition from large corporations, which are often in a better position to offer lucrative salary and benefit packages.
In order to acquire qualified employees at reasonable costs, many startups and small businesses resort to hiring contingency or “gig” workers and frequently turn to online talent platforms.
Despite the enormous potential, there are unique challenges that come along with a contingent workforce. Because contingent workers can be less committed to your business, you have to get to know them, build a relationship, be creative, and engage and reward them quickly. You have to be able to reach high levels of loyalty, engagement, and felt responsibility, especially among this type of workforce.
According to the U.S. Bureau of Labor Statistics, approximately 20% of small businesses fail by the end of their first year, 50% fail by the end of their fifth year, and 80% fail by the end of their tenth year.
Fortunately, small business owners can rise above the obstacles and succeed. I am one of many small business owners who has learned these lessons the hard way. As a small business owner, there’s a deep sense of satisfaction associated with developing and expanding your own business and skills. As Richard Branson reminds us, “A big business starts small”.
Nadine Greiner, Ph.D. provides Executive Coaching and Human Resources solutions. Her mission is to make the executive experience exceptionally enjoyable and effective. She believes that the world needs great leaders, and has dedicated her career to helping them.
As an organization psychologist and former corporate CEO, Dr. Nadine understands the pressures and demands executives face. She offers her clients the high expertise that only comes with three decades of consulting success, and a dual Ph.D. in Organization Development and Clinical Psychology. Dr. Nadine is an in-demand speaker, teaches in doctoral programs, and coaches other consultants. She is the author of two books: ‘The Art of Executive Coaching: Secrets to Unlock Leadership Performance’, and of ‘Stress-less Leadership: How to Lead in Business and in Life’. amazon.com/author/nadinegreiner