Every small business is different. However, there are some basic principles that stay the same no matter who you are or what kind of business you’re trying to grow.
In this episode of the JumpStart Podcast, Larry Fulton, Owner of LEFCO Worthington, Constance Hill-Johnson, MPA, Owner and Managing Director of Visiting Angels Living Assistance Services, Lamont Mackley, Principal of Entrepreneurial Services and Investing at JumpStart and Mike Marchetti, Venture Partner at JumpStart reveal their secrets to small business success.
Recorded live at JumpStart on November 1, 2017 with support from the KeyBank Business Boost and Build program, the Cleveland Foundation and the City of Cleveland.
Here is a recap of the 17 secrets the panelists discussed during the session:
1. Surround yourself with the right team and people
As the saying goes, hire slow, fire fast. Hire people you want to work with every day and who will have your back. Let these individuals do what they’re good at while you focus on the core business growth.
2. Hire an accountant, lawyer and business advisor who specialize in small businesses
You need partners who are invested in helping small businesses, as the challenges you face and milestones you hope to achieve will greatly differ from a large corporation. In addition, these individuals should be accessible and willing to educate you when needed.
3. Know your numbers (sales, margins, profitability, EBITDA)
It is absolutely essential that you become an expert on your numbers—this is what drives the sustainability of your business.
4. Understand and appreciate a line of credit
Get credit before you actually need it, so it will be available when the time comes. Be sure to use your credit, and manage your debt, appropriately.
5. Have a board of advisors
A board of advisors/directors brings expertise, fresh ideas and will help drive business strategy. Choosing a board that deeply understands your company and its goals can be a challenge. To start, consider inviting your banker, lawyer and accountant to sit on your board.
6. Serve on boards in the community
By joining a community board, you’ll become connected to other business owners and professionals in the area. You’ll also have the opportunity to help support your community.
7. Pay yourself first
As a business owner, you don’t want to be a financial burden to your business, but that doesn’t mean you shouldn’t place yourself on payroll. In the early stages of growth, figure out what you can realistically live on and pay yourself that amount. This decision should make financial sense for you and your business.
8. Choose the right bank
Your banker should act as a trusted financial advisor—one that can provide expert financial advice and find solutions to financial problems. For this reason, it is important that you cultivate a strong relationship with this individual. If they aren’t providing what you need, don’t hesitate to leave and go to another institution that better supports you.
9. A CEO should focus on the core of the business and growth, utilizing other’s talents
Your primary role as CEO should be to focus on the core growth of your company. Simply put—don’t try to do everything yourself. Trust your team as experts in their field and leverage their unique talents to move your business forward.
10. Focus on specific prospects and use a “sniper” approach
The key to successful selling is not about getting more prospects; it’s about focusing on the right ones. Do your homework and research your prospects before approaching them to better frame a conversation.
11. Customers are key to scaling your business
In most cases, your customer is much closer to the problem you aim to solve than you are. Enlisting them as a partner in developing the solution to that problem is more important than anything else for the growth of a very young startup—even revenue.
12. Retain customers for at least three years
Know your churn rate and have a clear understanding of what it takes to retain customers. You should aim to retain customers for at least three years if the relationship is mutually beneficial. When relationships become a burden to your business, let them go.
13. Don’t perfect your product without a go-to-market strategy
This is a common mistake many business owners make. It is very important to start by figuring out who your customers actually are and why they buy your product. With that information, you can work to balance product/service development with a solid go-to-market strategy early on.
14. Beware of growing too fast; marginal gains are instrumental successes
Backlogs, quality issues and manpower are problems that can arise from growing too fast. Aim for consistent gains over time in order to avoid these types of hang-ups.
15. For home-based businesses: move your office far away from your bedroom
To increase productivity while working from home, treat “going to work” as you would if you were headed to a traditional office. Get up, get fully dressed, and avoid working from your bedroom if you can.
16. Avoid commingling your business funds with your personal funds
When there is not a distinct separation between your business and personal funds, you run the risk of encountering tax and legal consequences. If you were to undergo an audit, it would be your responsibility to establish proof of valid business expenses, which can be difficult with comingled funds.
17. Ask for referrals for bankers, accountants and lawyers
Choosing the right partners is key, and you should assess bankers, accountants and lawyers with the same scrutiny you would give a prospective employee. Interview these individuals before engaging to get a feel for whether they are a fit for you and your business.
These secrets are just a starting point. For more personalized assistance, we encourage you to schedule a one-on-one business assistance consultation with one of our Core City: Cleveland business assistance experts. To get started, email [email protected] or call 216.456.2670.