Great Tips for Your Small Business: Increase Your Profit and Joy in Your Work

Author

INTRODUCTION

Since it is a given that the key to success is mostly hard work and dedication, you had better really love what you do.

One of the most difficult things to decide when writing a book of any kind is how to start. Those first few words, the ones that set the tone and encourage readers to read on, can keep a writer tied in knots for hours.

I was in one of those quandaries when a conversation made me wonder what it is that makes many of us want to work for ourselves — what makes us want to work from home or take on responsibility for a business location and staff. We give up the security of a regular paycheque and paid benefits. We take on the worry about details that employers handle — things like paying the bills, marketing, having innovative products and services to sell, all of that fun stuff.

The reasons we do it are numerous. One of the big ones is the freedom to direct and control our lives. We want flexibility in when and how we work. We just plain don’t want someone else deciding how we spend eight hours of our day. Entrepreneurs live by the credo that work is a huge part of our waking hours, so we had darn well better enjoy it and take satisfaction in what we do.

And, of course, we have a passion we want to pursue.

Whatever your reasons, some folks are saying that the era of entrepreneurship has arrived. The number of small businesses is on the rise. Although I can see that small business is taking its place in the economy, I think it’s more a case of it being recognized more than in the past. This isn’t a new phenomenon. I had a little lesson that proved that when a cousin from England came to visit, bringing me a copy of an in-depth family tree. Turns out the women in my family dating back several generations have been entrepreneurs. One was a milliner (making hats), another apparently baked from home, and another was a seamstress. Of course, many of the men had businesses as well, but I got a kick out of the gals. Women, the hidden entrepreneurs, have been supplementing the family income with home-based businesses for generations, so I felt I fit right in.

I also realized that I constantly draw from my entrepreneurial family and friends. They are my inspirations and my role models. We have a kinship. I am surrounded by small business owners; many of them are quoted or profiled in the following pages.

Entrepreneurship hasn’t just arrived. It’s been here all along, but it is finally getting more recognition. People who were never thought of as business people are now being acknowledged as entrepreneurs. Take me, for instance. Although I do wear several hats out of necessity, I am first and foremost a writer. That is where I derive the bulk of my income and where I primarily work. A writer is not usually considered a business owner. Until recently, writers have commonly been thought of as starving artists living in cold, dank garrets, so passionate about their craft they are willing to sacrifice all for it.

That perception has changed — or should I say is changing — as the world recognizes that many people are making a good living from crafting words. Like many professions, we have superstars who become media favourites and earn scads of money. But behind them are the rank and file, the hundreds of writers who create many of the things you enjoy: magazines, books, websites, brochures, newsletters, movies, songs, newspapers, television programs — even the evening news starts with writers. The list is almost endless. Some are salaried, like the writers of news programs or sitcoms. But many freelance. They are one-person enterprises who treat what they do as a business and quietly work away supporting themselves and their families through their ability to string words into useful or pleasing blocks of information. Their products or services, depending on how they are marketed and sold, can be presented to the world as books, as text in a tourism brochure, or even as the words on the back of a cereal box.

These folks are now being referred to as cultural entrepreneurs. With our era’s all-consuming passion for labelling, small businesses now have various monikers: home-based business, microbiz, small business, and cultural entrepreneurs. No matter the name you give it, entrepreneurship is opening many doors. It is becoming recognized as a good way to both make an income and live life outside of the box.

Many of the people who turn to owning and operating their own businesses approach life a little differently from other folk. They love what they do, often passionately believe in what they offer to their clients, and are not afraid to take a risk or live on the edge. They can make do without the security of that weekly paycheque because they are willing to juggle and make things work.

The truth is that down through the ages, entrepreneurship has made many things possible:

the generation of great wealth;

the lifestyle of your choice;

the pride of doing it your own way;

the option to explore the possibilities; and

the joy of adventure.

To my mind there is no better way to learn, to grow, and to keep your enthusiasm than by hearing or reading about others who have walked the walk we aspire to. Their stories are varied, inspiring, and as good as most novels.

TIP #1

If there is a tip I can to pass to those aspiring to become successful in their own business, it is to listen. When you have an opportunity to hear success stories, take it. Read about them. Absorb what they have to say. These are your role models.

Nowhere is the following advice more appropriate than for those starting a small business or operating an established one: have a plan, apply due diligence, diversify, look at tax implications, and prepare to stay in for the long haul. In all instances, add one more credo: kick the tires (or, in easier terms, do your research).

The way I figure it, there are two kinds of people who will read this book: budding entrepreneurs in start-up mode and entrepreneurs who feel a need to fine-tune or develop their business.

In either case, doubts may have crept in because you hear doom and gloom reports about the economy, or perhaps you wonder if there are small things you could be doing to improve or refine your business. Or maybe you, like me, just love reading about and learning from others.

There is no question that those with entrepreneurial spirit are a different breed. We are part of a community of people who dare to venture out and do things their own way. We are not satisfied to simply be a cog in the wheel, we want to be driving the darn truck and own it too. Frankly, the only people who really understand us are others of the same ilk.

TIP #2

Factor time with others of similar mindset into your monthly plan. Getting together with other small business people reinforces your belief in the path you have chosen. You are not alone.

Learning from others is just one phase of small business development. We have to consider many things.

Look at the facts that give you encouragement, but look at them realistically. For instance, Statistics Canada tells us that in 2004, consumers spent $346.7 billion in retail stores, up from $287.8 billion in 2000, representing an average annual growth rate of 4.8 percent.

To use that statistic wisely, you would have to first look at the figures in your sales area. For example, in my home province of Prince Edward Island that figure is $1.385 million, or an annual growth rate of only 2.1 percent. You need to see where people are spending their money and what the trends indicate they will spend it on in the near and distant future.

There is a new buzzword out there in the world of business: SOHO. To those in the know this means small office, home office. It is a growth segment of our economy being targeted as a good potential market for products and services by many of the biggest players in the industry. This is good news, not just because our needs for equipment and supplies are being met, but also because recognition is also coming from governments, who are providing more services, and, to a small degree, from financial institutions.

Within the pages of this book, I often refer to businesses or people I admire. Many are in Atlantic Canada simply because that is where I live. Don’t take that as meaning that this book doesn’t apply everywhere. There are people from across North America between these covers. And after all, if it works on the East Coast then it should work anywhere. I feel it is important to look at what people in other areas are doing. Using them for inspiration introduces new concepts and ideas that might fit your area. Just adjust these tips to your own situation.

Without question, we are seeing more and more people turning to owning their own businesses, especially serving the corporate or government sectors. There are reasons for it. Employment is not what it used to be for many of us. Many corporations treat employees as disposable, hiring them for a project and then letting them go until the next time they need their particular talent. There is also a trend towards hiring people for reduced hours, keeping them as part-time employees rather than having to pay full benefits and good wages. That skilled but displaced talent is the pool from which we draw the consultants that are so prolific today.

There is another factor. Many individuals in their fifties and early sixties are taking voluntary — or involuntary — early retirement, then opening a small business to help generate income. For many people this is a necessity due to the ever-increasing cost of living. Their need for income makes these people formidable competition.

Young people are also surging onto the small business landscape and doing amazing things. They have the huge advantage of being at one with the high-tech, trend-driven world of today. Young women and men are quickly attaining success in businesses that those of my generation would never even have thought of. They are daring and inspired.

There is also a growing segment of the population who are opting for lifestyle. These individuals have set criteria for the quality of life they want to have with their families. Or they have a passion they want to follow. Their needs are met by setting up a home-based business.

As well, the ease of entering the computer or cyber-based business world has inspired many to set up home-based businesses and to export their services globally.

TIP #3

Forget the notion of I can’t do it and remind yourself I can do it — it’s just a matter of figuring out when and how.

Leaving a job to follow your calling means putting everything on the line, including money, ego, and security. It is a risk, but one that you control, and one that can pay back huge dividends.

In introducing myself, I ask you to remember that I have become successful in a field that is generally labelled as working poor. Yet I know of many who have not only attained good incomes but have done it while committed to a lifestyle of their choosing. They are stay-at-home moms or people who travel the world. They live lives others envy. How? By treating what they do as a business. It is management skills and the ability to believe in the value of what you do that make an entrepreneur.

TIP #4

Treat books such as this and other learning material such as small business or industry magazines as companions you can pick up and put down. Sometimes if you’re stuck or you just can’t seem to find an answer you are looking for, a few minutes’ reading will clear your mind, inspire new thoughts, or get you on track. This book is designed to be one that you can come back to time and time again. You might like to read right through, but I do urge you to keep it, along with other useful books and clippings from magazines or newspapers that you found useful, and to refer back to it from time to time.

TIP #5

The most important move or decision you make is the next one. So do read on!

CHAPTER 1

And So We Begin

We all have to begin — no matter whether it is a new business, a new era within an existing business, a new project, or a new direction. Liken your new beginnings to taking a journey. Along the way we will encounter bumpy stretches, a few detours, lots of smooth going, scenery, and great adventure. On arriving at our destination we will quickly discover new highways calling us to new adventures and destinations. Like travel, the entrepreneurial highway is filled with exciting new beginnings.

Any beginning is an exciting time of change and challenge, achievement and growth, setbacks and frustrations. As beginnings go, it is normal to experience ups and downs, good times and bad times. Don’t let it worry you; this is part of business. In fact, if everything went well every single day I would get nervous. When will the axe fall, I’d wonder, for it surely will. Like life, business cycles.

So why do we do it? Why do those with an entrepreneurial bent take this path in life?

TIP #6

Self-employment, or developing and operating a small business, is best described as the dream job you create for yourself.

While some of us may feel we are forced into creating our own jobs by lack of employment opportunities, the reality is we choose to be entrepreneurs. Even in the most desperate situations, we make the decision to follow this path instead of another. In fact, the main motivators for starting a business include having a passion for doing what we do, earning more money, and being our own boss. We are seldom driven totally by necessity.

There are many things we dream of:

being in control;

being able to follow our own approach to work;

setting our own hours;

reaping the benefits of our hard work instead of lining someone else’s pockets;

doing something we love;

being able to mesh our personal and working lives so that we are home for our families;

living in a specific (perhaps isolated) location;

avoiding time stuck in rush hour traffic and bosses we have to cater to;

meeting the challenge; and

proving ourselves.

CHOOSING WISELY

The real question is how to start and grow a business that is right for you. You may, for example, want it to stay small and manageable. The idea of moving from your home base to a larger location, processing more orders, and dealing with employees may be abhorrent. And you know what? That is perfectly okay. By knowing that one thing you have taken the time to define an essential part of your dream.

TIP #7

One of the most important first steps is to take the time to think, focusing logically on exactly what your priorities are. Marry your dreams with your realities. We take a closer look at that in Chapter 2.

TIP #8

For a growing number of people, taking skills learned through past jobs, hobbies, volunteer work, school, or training programs and transforming them into the basis for a small business is the key that opens the door to independence, higher earnings, job satisfaction, and a better lifestyle. These people shed a lot of worries and stresses and replace them with creating or doing things they enjoy, all while reaping the profits.

There are a growing number of service providers, consultants, small manufacturers, creators of specialty products, direct sales superstars, artisans, and creators who have opted to do it their own way.

You have to remember that each type of business has its own special requirements. Those requirements are often more diverse than what you would have done as an employee. In your previous job you would have had limited responsibilities in a specific area, such as sales or accounting. Now you have to wear many hats, ranging from chief decision maker to delivery person to janitor.

JOY AND THE JOB DESCRIPTION

The joy factor, of course, is that now you can write your own job description, choosing what you are going to do, your benefits, and the salary you need. Decide what tasks you will get others to do — such as bookkeeping, delivery, or website design. Then you have to establish a workable plan to get yourself and your business to function.

It all starts with establishing appropriate goals. Remember your reasons for starting this process, the important things like living the lifestyle you want, using your creativity, and reaping the benefits of your labours. Now you have to figure out how to attain those things while making money to support you and yours. At the top of your goals list you have to keep those priorities in clear view.

TIP #9

Determine what talents or skills you have. Sometimes these are things you used in a former job, but often they are not. What you did at work may have been so narrowly focused to a particular task that you don’t feel you have the skills you need. If you need to learn new skills or broaden your knowledge and expertise, then figure out how to do that. Perhaps, if you are willing to wait — if you have a long-term plan — you can find employment that will let you learn while working. Or you may need to take courses or return to school.

Having a plan working for you is vital. For instance, if you are planning to leave a job to set yourself up as a consultant, you can take appropriate courses on setting up a small business, marketing, or technical skills specific to your field. By using evenings, weekends, or vacations it is possible to upgrade skills before saying goodbye to a regular paycheque. It’s all part of the long-term plan.

Innovation must be a constant in your business life. In today’s marketplace, having innovative marketing methods and effective means of serving your clients is as important as creating new products or services.

TIP #10

Determination is a great asset — be tenacious. Whether you are starting up or making dramatic changes to your business, it may take time before you see any substantial returns. A similar situation may occur if you have a seasonal business or if there is a downturn in the economy. My son calls them negative cash flow months, where more goes out than comes in. Be prepared for that. You must be committed to sticking with it, to continually marketing, to getting that first order, then the second, and to weathering the slow sales periods by using the time effectively.

TIP #11

If you know your business is cyclical or will have slow months, prepare a list of jobs to keep you busy at that time. Prioritize them. Perhaps this is time to paint your office, catch up on your bookkeeping (how great to approach tax season with the knowledge that your books are up-to-date!), boost your inventory for the busy months ahead, or develop a new product. By having your time scheduled in this way, what had been a worrisome calendar period becomes something anticipated as a creative or important task time.

FLOW CASH IN THE RIGHT DIRECTION

The experts will tell you that you should always have a nest egg that will cover six months if necessary. They are right on, but for most of us that is a little unrealistic. Let’s just say you should set up so that you can weather the tough times. One of the advantages of a home-based business is the lower financial commitment required each month. Frankly, you need mental fortitude and determination as much as the cash assets.

TIP #12

Be sure your goals always include income maximization. The downside of entering the world of small business is an end to that secure weekly paycheque, with benefits and taxes paid. You will find it necessary to reinvest some of your earnings into the business to maintain growth. And you will almost certainly have times of uncertain or irregular cash flow. The upside is that you have unlimited time you can choose to work and unlimited products or services you can produce. There are also tax benefits that can help you retain more of your income by claiming legitimate expenses.

There are other stress factors to running your own business besides financial worries. Some people miss the social aspects of working in a busy, vibrant workplace and find working on their own lonely. Others worry and fret about the bottom line, where the next order is coming from, and so on, to the detriment of their health. Work cycles make you extra busy sometimes and not busy enough at others.

TIP #13

If your business keeps you busy at times that are inconvenient for the family, such as summer or Christmas, acknowledge that to them. Don’t make promises you won’t be able to keep. Instead, be up front and make plans with them for alternate time together, perhaps