The following is a guest post by Dave Ashley.
Ask any Fortune 500 executive and they’ll tell you that running a small business isn’t all kittens and rainbows. There’s a long, hard road to walk between hiring your first employee and retiring in Maui, and when your product isn’t selling or your business is losing money, the stress can make you wish you’d never started out on your own in the first place. How are you going to sell your business and make your island getaway when your company has essentially become a strip-mall facade concealing a seat-of-the-pants operation managed by harried worker chimps in the cluttered offices past the lobby?
There are solutions to many of the common frustrations that small business owners face, and step one is simply to recognize problems when you see them. It’s sort of like a 12-step program, but with money. If your company is sputtering, take a look at these common frustrations and see if you can’t address one or more of them to help yourself dial up the profits in the next quarter.
You can’t distinguish between confidence and blind faith. When it comes to having faith in your business, there’s a fine line between confidence and delusion. While it can be inspiring to play the role of the fearless leader when your business falls on hard times, you aren’t doing anyone any favors by manning the helm of a sinking ship.
If you want your business to succeed – with the goal of ultimately selling it – you must learn to view it objectively. You’ll be faced with tough decisions as a business owner, and in this economy you have to follow the money instead of the ideals.
One good way to get your bearings and take stock of your situation is to get an annual business valuation from a professional agency. This way, you can see exactly where you stand financially. You’ll also learn about areas and processes that are ripe for improvement. A valuation forces you to be honest instead of fatally hopeful, which can help you make tough calls when problems land on your desk. More than that, there’s nothing better than a valuation for getting your business in tip-top shape and ready to sell.
You can’t bring in enough customers. Just because your business has been around for ten years, that doesn’t mean you can slack off on the marketing end. A basic tenet of capitalism is that a successful company should grow every year – and that sort of expansion requires promotion, promotion, and more promotion.
If you’re suffering from a chronic lack of customers, it’s probably because nobody knows who you are. In this economy, you need to dredge up customers like your life depended on it. Give your business a marketing recharge by opening a social media account at Twitter, Facebook, Google Plus or Tumblr. Use them all. Try leasing a regional vanity number – not only will this boost your customer base, it will help you build your brand. These services are free or cheap, and they’ll expose your company to thousands of potential customers. With a little practice, you’ll reach a larger audience while gaining customers and saving money on paper advertising in the process.
Your overhead overshadows your profits. If it seems like each week’s ledger shows that you’re falling further and further into the red, then it’s time to reevaluate and make some changes. As the saying goes, a penny saved is a penny earned, and anyone can tell you that cutting down on costs will at least help you stretch the money you are making.
There are plenty of ways you can reduce your overhead without any significant effort on your part. Try sharing your advertising costs with neighboring businesses. Buy used and recycled office supplies. Read up on tax laws to maximize your deductions. You should also consider taking on a free labor force in the form of unpaid college interns. You’d be surprised the lengths some students will go to for a glowing reference to use on their resume. Anything you can do to lower your operating costs and increase your profit margins in the months and years leading up to the sale of your business is a step worth taking.
Your workforce is costing you your time and your sanity. Hiring a new employee is a big responsibility for any small business. Between training the new hire, overseeing their work and managing schedules, taking on a large workforce early in the game can be too much for many business owners to handle. “The biggest mistake I made in my early hires was hiring too early,” says Louis Gudema, leader of a marketing agency in Watertown, Massachusetts. “We were not as profitable as we might have been if I had been slower to hire.”
An efficient workforce is a valuable thing – especially when it comes to selling your business – but only when you grow it responsibly. Figure out how much help you really need, and determine when your business will really be able to hire additional employees. By researching how to maximize your workforce efficiency, you can make sure you’re getting the most out of every employee before taking on another mouth to feed.
Running a small business can be frustrating, and selling one is a challenge all its own. Yet both are quite manageable – as long as you can recognize your problems and solve them appropriately and quickly. Your business didn’t start overnight, and it’s not going to fix itself immediately. But if you have patience, a true commitment to your goals and a little bit of creativity, you can turn your headache of a job back into the dream job you meant it to be. Then you’ll be ready to sell, without all the background stress that comes from knowing that your business isn’t really what it seems to be. When you improve your operations and make your business work as it should, your genuine confidence itself becomes a selling point. And after that? Who knows. That house in Maui may only be a few good decisions away.
Dave Ashley is the founder and CEO of Tele-Name. He created Tele-Name to bring the powerful advantage of vanity toll-free numbers to small and mid-size companies on a regional scale. For the past two decades, Tele-Name has been helping local business dominate their market through the use of the best vanity numbers in the country. Dave is committed to helping small businesses everywhere succeed.