Caught you with the title, didn t I? Chances are, you don t want your business to grow slowly. No, you want fireworks, and a little animated line that shows profits going through the roof.
That s all well and good, provided this is your third or fourth successful business. If this is your first business, you may need to take it slow. Why? Because there are mistakes that are waiting to bite you. You may not be properly prepared to handle what is coming down the pipe, even if it something grand, like a $100,000 contract.
With this in mind, I m going to lay out a couple of mistakes to avoid, and a few systems you will need in place.
Common Capital Killers...
The first mistake everyone seems to make, is their need for an office. Unless you are selling a product that requires a fair amount of foot traffic, do not go out and lease, rent, or otherwise procure an office outside of your home.
Multiple friends of mine have done this very thing, and it has eaten into early profits. If you have an office, then you will want a phone system. If you have a phone system, then you will need to purchase internet service. Occupying an office is an easy way to spend $700 $1100 a month for which you will get nothing in return. If you have a spare bedroom, with some decent used office furniture and lighting, it will be more than sufficient. In the beginning, it won t be a huge inconvenience to meet a client at their office. They would probably prefer that you come to them.
The second mistake I see is a problem along the same line. People immediately feel the need to upgrade their transportation, at the worst possible time. This is especially tempting to people who are in sales. Never spend good money on image maintenance. Your business is young.
If you already have a car payment, buy a magnetic panel that has your business phone number and name, and stick it on. In some cases, that may qualify you to write off some, or all of your car payment as advertising. Check with your accountant on that one, as certain guidelines have to be met for consideration as a legal deduction.
Accounting and Legal considerations...
Speaking of an accountant, you should have a good one, and use him as little as is humanly possible(at least in the beginning). If you can, learn to use a basic invoicing/accounting program, like Quickbooks. That will save you a fair amount of money. If you aren t great with books, or have more complicated financial transactions, then you may need to hire a part time bookkeeper to enter transactions, and make sure everything is ship shape.
Legal issues are another fun area. Whether or not you hire a lawyer will depend a great deal on the industry you are in. I would recommend LegalZoom for standard legal documents. Basic contracts, scope of work documentation, and non disclosure agreements are pretty standard from state to state. Do buy a template from someone like LegalZoom. Don t download the first free one you find, and modify it for your purposes. You never know what you are missing in the fine print. While legal fees can kill you, they can also keep you from unnecessary lawsuits and expenditures. Pay for it now, or pay for it later...with interest.
With regard to keeping legal records, I prefer to converse via email, rather than verbally. In this manner, I can have a written record of the conversation and agreements, rather than a flimsy, verbal contract. In addition, make sure you have purchase order, or a signed contract for any invoice you issue. Properly documented transactions can save you thousands in legal fees, and lost profits. Again, accountants and lawyers are people you don t want to see in the expense column every month.
What about hiring employees?...
This can carry a huge, legal burden, depending upon their legal classification. As a small business, your best bet is to hire a 1099 contractor, rather than a full time W2 employee. Why? Hiring a W2 employee immediately makes you responsible for paying equal parts of Social Security and Medicare tax. Depending upon the number of employees who are classified as W2, you may be required to pay for workman s compensation insurance, along with Unemployment insurance premiums. In some cases, it is not legal to classify workers as 1099. There are 20 questions that the department of Labor asks to qualify someone as a contractor. If you have any questions, you should call the US Department of Labor, before hiring for a position.
What about advertising and a website?...
Both of these sections go hand in hand. Start by getting your company listed with Google, Yahoo, and Bing Local. You ll have the upper hand when someone searches for rocking chairs in Boston . Post pictures of your product, company, hours of operation, and services. It s simple, and easy.
If you want a website, I would recommend a service like Dreamhost(at $10 a month for hosting), and installing Wordpress. For a theme, I would recommend Thesis, which is infinitely customizable. If you aren t comfortable with setting up something of this nature, then call a local web design firm. It shouldn t cost you very much for a basic website, and it will be a worthwhile investment.
Stay away from the Yellow Pages. In most cases, it is not worth the investment, either from a web standpoint, or in return on investment spent. If you are going to spend money, spend it on a service like Google Adwords, where you can track your return on investment.
Yes, if you want the most profitability in this area, you will have to learn how to use such systems. There is no path around it. The business will grow faster, if you learn how to use the internet as a marketing system.
With regard to offline advertising, do it in ways that cost you little or nothing. Barter services with a print shop for flyers. Talk to a local pizza company, and see if they will deliver your flyer with their pizza (for a small fee, of course). Be creative, be imaginative, and expand the definition of your business and how it relates to customers.
What About Customers...
Ah, yes. Revenue generation. This is why I call it growing your business slowly. Unless your business is in a huge growth area, the first client is going to be the hardest to get. The second will be a little bit easier. On from there. While you can get leads more quickly through the internet, the easiest way to get a new customer is a referral from an old customer. Do quality work, sell a quality product, provide a quality service.
Oh, Come On...
Yeah, I know,you signed up to hear some buzzword from the business gurus. Some Jedi mind trick that will make everyone pay you good money. Honesty, quality, and thrift will make your business grow. There are no shortcuts. So listen up, take the advice to heart, and prepare to grow...slowly at first, and then exponentially.
Author Resource:
Kurt Hartman is head of Web Development for Mobile Fleet Service, Inc. They sell earthmover tires on 6 continents, via their website, located at http://www.buybigtires.com .
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