When Joe called for some small business advice for his solo-preneur business, he laid out a familiar story.
A seasoned professional, Joe started his handyman business after the company he worked for suffered massive lay-offs.
With his years of experience and handyman work in constant demand, he was sure he could go out on his own and work for himself.
He was right. He lived in an older community, so he spread the news to eager neighbors first, and his wife was active in the PTA, so she spread the news to her contacts as well. He soon found himself booked several weeks in advance.
At first, things were hectic, but seemed to run smoothly. He was doing everything he thought was necessary to run his business by himself, convinced that it would cost too much to hire help.
He got in projects and completed them. He had a steady flow of work, and the money was coming in on a fairly consistent basis. He purchased a new work truck and put up a website.
But as his expenses and his business grew, so did his problems and stress level. Anxious to have enough money to pay his bills and support his family, Joe found himself saying yes to every project that came along, often giving clients unrealistic completion dates, which resulted in spending long nights and weekends on the job. His once eager clients were frustrated and disappointed, and were letting him know about it on a regular basis.
While all of this was going on, a friend of Joe’s introduced him to an angel investor who might be interested in providing some well needed capital. Joe was supposed to be working on a business plan with some financial projections to show him, but he never found the time to do it, and lost out on a promising opportunity.
Joe spent all of his time working feverishly on his clients projects, neglecting to focus on anything else.
Insisting that he could do the books himself, and not wanting to spend the money on a part-time bookkeeper, he got behind in his invoicing, a tax deadline had passed, and his once delighted customers had become put-off by his rushed manner.
Joe had never developed a business plan. He hadn’t thought through what was required to run and sustain his business over time. He hadn’t developed a marketing strategy, and did very little outreach. He had never done any financial projections to see how much money he would need to run his business, and to help it to grow.
To make matters worse, although he was still quite busy, Joe knew in the back of his mind that when this project was finished, there was no other work lined up…
If Joe’s situation rings a bell, here is some small business advice that may help:
Even if you run a small business, you have to think big!
Big companies have a business plan. They have a marketing strategy. They market their company all year long in different ways. They hire staff, freelancers or outsource tasks that they can’t handle. They have departments to handle production, project management, sales, marketing, finances, HR etc. They take time to review and analyze what’s going on.
The reason larger companies do all of this, is because running a business requires more than just doing the client work. And these “other things” apply, regardless of whether you’re a one man shop, or a multi-national corporation.
Now, you may read this and shake your head, and say forget it, you simply don’t have the resources to hire, to outsource, to delegate; and you very well may be right. The question is: Can you afford not to?
Just because you don’t have the money to hire a bookkeeper or accountant, engage a project manager, marketing director or sales manager, doesn’t mean your business doesn’t need attention in these areas. Somehow, you have to find a way.
I suggested to Joe that he start somewhere. His hourly rate was about $100 an hour. It was obvious that in order to get things under control, that the first place he needed to look was in the financial dept. With an experienced bookkeeper taking care of the invoicing, paying the bills and keeping the books, he was able to solve three major problems: cash flow, his credit rating and keeping the IRS off his back.
The part-time bookkeeper he eventually contracted made about $25 a hour, one fourth of Steve’s hourly rate; allowing him to utilize those hours to bring in revenue, do more marketing and or repair some of the client relationships that had been damaged.
We developed a 3 stage plan to get other areas of the business under control. By the end of that year, Joe had made significant headway.
Today, Joe has a successful, profitable business. The bookkeeper, who has been a life-saver, works about 10 hours per week and was able to quickly get the finances under control. Once that was done, he was able to hire a web developer to organically optimize his website for search terms which helped bring in a consistent flow of new business. As demand increased, he found two other reliable handymen and trained them to provide excellent customer service.
Now that he’s got his business running much more smoothly, he’s working on a franchise plan to pitch to an investor.
If you’re curious about how “thinking big” can help your business, click here to apply for a Business Sanity strategy session today.
