When launching a new business, there are a lot of growing pains. As the business owner, you are going to be learning a lot of things that you don’t know a lot about, and things you don’t have a great deal of skill in like technology, marketing, legal, employee relations, employee law, accounting, finance, and the list goes on! You will quickly discover you don’t know what you don’t know!
Being a solo entrepreneur is only feasible for so long. As a business grows, it will become necessary at some point to hire employees. This is a critical tipping point for many entrepreneurs. The business requires more hands and bodies to do the work, yet the financial and emotional commitment of taking on employees feels like a huge step. Once that first employee is hired, the business owner can feel an enormous amount of pressure to achieve the necessary sales levels to allow them to continue to make payroll.
As the business grows, pressure can build to another tipping point, when more employees are needed in order to meet the demands and pace of the additional business. This is the point at which business owners consider getting small again. They feel overwhelmed, stretching themselves too thin, and are a bit scared of hiring more employees and the commitment that comes with that. Getting small again can be tempting. The “technician” who became the business owner may feel that by getting small again, they will feel more comfortable. They assume it will give them time to get their arms around the business again, but that is rarely the case. Businesses that get small again rarely succeed.
So how does a business owner avoid this pitfall of growing too fast? It begins with a plan, a key structure, a blueprint, or more commonly referred to as a business plan. If you are going to need funding to start your business, a business plan is absolutely required. Wherever you go to get start-up capital, whether it is a bank, the Small Business Association, or an individual investor, you will have to have a business plan.
What if you don’t need to get outside capital? Do you still need a business plan? Absolutely. A business plan helps you to envision the future. It forces you to ask key questions that will help you to plan where you want to position the business in the marketplace, what key processes must be developed, who your target customer is, who your competition is. There are many free resources and templates available online to help you build a business plan. Don’t worry if you feel like you are guessing. Some guesswork is involved and not every part of the plan will be accurate. A business plan is a living document that needs to be reassessed, refocused, and adjusted as time goes on. Every business needs a business plan. A business plan is the number one, key structure that every business needs to succeed.
“If you fail to plan, you are planning to fail.”
~ Benjamin Franklin
The second key structure every business needs to succeed is an insurance policy. There are many different kinds of insurance. What is the most important insurance policy every business should have? Is it General Liability? Or maybe it is Commercial Property Insurance? Or is it Business Income Insurance? Or Workers’ Comp? All of these types of insurance are important, but there is another type of insurance that cannot be purchased from an insurance agent. The most important insurance a business needs as part of their key structure is documentation.
Documentation of how the business operates on a daily, weekly, and monthly basis is an absolute necessity, yet many small business owners fail to take the time to set up this key structure, often to the business’ demise. The small business owner is often so busy running the business, they don’t feel they have the time to write down their operational processes. But imagine this: if you were in a car accident tomorrow, or you had a heart attack, or you had to step away from the business to take care of a sick loved one, how would the business continue to operate without you? Documentation of your business processes is that key structure that would allow you to have someone else step in, in the event of an emergency. An employee, family member, or friend could at least keep the business operating so it doesn’t go completely dark. The only way that can happen though, is if you have your business processes documented before the emergency happens.
Those are the two key structures every business must have to succeed: a business plan and the documentation of business processes. Has there ever been a business that experienced success without having these key structures of a business plan and business process documentation in place? Yes, of course, but the businesses that have these key structures in place experience a dramatically higher rate of success and longevity than those that don’t. So set yourself and your business up for success. All that is required is your imagination, organization, and time. Ultimately, that is a small price to pay for years of growth and profitability.
Retail Level Up provides coaching, training, and consulting services to individuals and teams. Visit www.retaillevelup.com to learn more and to schedule a free consultation.