With the economy slowly coming back to life small businesses are looking around and seeing just how many went down. With the majority of people in North America working for firms and companies that didn’t receive any financial help small business is now wondering why.
The US government was willing to spend over a trillion dollars to help out about a dozen large companies but for some reason they decided that spending a few million dollars to help thousands of small companies wasn’t worth the effort. Small business is really the source of income for most Americans and without help they are suffering badly.
Now with some business starting to pick up again a new and more dangerous problem has occurred. Once again no money is actually available and business are being choked out of their ability to expand. With the economy rising why is the government not targeting short term expansion funding and start-up grants for small business?
When small businesses decide to grow they grow with incredible speed. This is what is happening to many small businesses today, or it would be if they could acquire the required bridge financing to actually hire staff. I know the government has said that a fair number of the recently lost jobs are jobs that will never come back so why are they not helping create the new positions that could be so easily created.
This is beginning to sound like quite a rant but the truth is that normally small business doesn’t really need the governments help. Yet with banks being stupid like always and the economy only just starting to rise out of the crapper the government really needs to get with the program to help boost small business. Heating up small business growth is good for everyone, not only will it provide much needed jobs but small businesses are the big business of tomorrow so we need to build them up before the government has spent billions to achieve nothing.
So you are considering leaving the comfortable world of employment and joining the legions of people who are building up new businesses? The world of an entrepreneur is a dangerous yet rewarding world and must be approached with care and consideration.
For those who are seeking to start their own businesses instead of joining the work force here are some pros and cons of being an entrepreneur.
Working for yourself does come with a certain amount of comfort and security. Its pretty unlikely that you are about to fire yourself so at least you have a position for the foreseeable future. The flip side is you cannot pay yourself unless the business makes money and that is only partly in your control. Customers need to part with money before you get paid so unless you are really good at convincing people and have a perfect and ready market you will have an uphill battle until you are able to slow down even a bit.
On the other hand those who have regular jobs have a certain amount of security and comfort. While lately with the economy you might be afraid of cutbacks this doesn’t impact your position of employment the same way it impacts an entrepreneur. You get to leave work at work and go home, and entrepreneur is at work no matter where they are.
Lots of people get into small business as a way of making tons of money. While the success stories you will hear are quite true you also need to realize that those stories are made up of less than 20% of the total population of small businesses. A huge percentage of small businesses fail quick and hard. So while the money long term could be quite nice, the money now is basically crap.
Employment on the other hand promises you money now and some raises over time. This is very nice for most people because we usually don’t have a steady supply of money to live on until our business actually takes off. The comfort of a steady and basically predictable income is huge.
Its very cool to start a business and become your own boss. Really it’ll make you the coolest person on the block. At least until a few months pass and you don’t suddenly start driving a hot sports car. Building a business is incredibly hard work and quite simply isn’t very fun until you become successful.
Employment isn’t quite as cool, but it is the normal. Being employed doesn’t make you a star right away but you could work your way up in the company and become someone important over time.
Work is work, no matter which way you look at it. If you are not willing to ride the tides of a business then you aren’t ready to start one. If you are ready to take a huge chance and suffer for it, you could be one of the next great success stories.
Small businesses are best positioned to really take advantage of any type of economic recovery. They are nimble and able to adapt on a day to day basis rather than waiting for weeks or even months of data to pile up. This means that while things are starting to look a little better it is definitely starting to approach prime time for small business.
In general an economic recovery is a slow and steady improvement of confidence and spending. Thus in the end people are making more money and in turn feeling free to spend it. While this is typically a slow process it is a process that is generally heralded by small businesses. Most of the jobs lost in an economic downturn are never officially recovered by the companies that shed them. The jobs are regained by new companies and innovation that is used to drive the economy forward.
So while confidence is slowly building in the economy, now is the time to brush off your business plans and start constructing the framework for a successful business. Catching the upswing early is the ultimate time to start a small business. You can reap the benefits of cheap labor and produce new and interesting products for both the local economy as well as the global economy in general.
When is the best time to start a new company? 20 years ago. When is the second best time? Today!
With all the costs that can be attributed to business one of the largest potential costs is often forgotten. The cost is conveniently hidden as a secret cost in so many business activities and yet it has the potential of really costing you a lot of money.
The cost I am talking about is the cost of replacing people. Employee’s are really the backbone of a business and it costs an enormous amount of money to train and keep and employee. The item that is often missed is how much money it costs to replace an employee.
Employee’s are quite varied. Some desire simple things like money, or a flexible work day. Others are more complex and desire things like challenge in work, or varied tasks. Each employee is completely different and yet we often treat each employee exactly the same.
I’m not talking about treating employee’s the same as in providing respect or a safe work environment, I mean in how employee’s are compensated. Rather than truly looking at what an employee wants for compensation we just postage stamp each employee. You do such and such so thus you get paid this much. Employee’s have hugely varying value and thus should not only be paid differing amounts but should be looked at individually.
This is where small businesses really have the edge on large businesses. Since you are much closer to your employee’s you have a better chance of understanding what an employee really desires. Keeping an employee happy at work goes a long way to not only getting improved productivity out of the employee but also keeps you from having to train a replacement all the time. Training an employee typically costs you 2 or more employee’s wages as well as drastically reduced productivity.
Please note I am not advocating paying some employee’s drastically more money than others, that can be a great way to chasing the lower paid employee’s away. I am talking about looking at the total package of compensation and especially at the parts that don’t have a huge impact on the budget. Things like giving people the occasional flex day off, or enabling people to seek more challenge at work. Happy employee’s are productive employee’s and when you can keep them happy without paying more money you have finally succeeded.
I understand that right now a fair number of small and large businesses are busy chopping people from the payrolls. Just remember not to alienate those you are keeping, if they are no longer happy to be working for you, you will end up loosing more than you bargained for.
Other than money (discussed elsewhere), what do you need when starting a new business?
Time has got to be one of the most important factors in the success of a small business. A new small business will consume incredible amounts of time, so much so that you will sometimes find yourself dreaming about doing work. These dreams of work are not very comforting when you consider that you likely left a fairly cushy dead end job to begin this life.
A business is not a success in merely a month or even ten months. A small business can take a year or even 5 to become anything other than a toy business. The quantities of time you will be required to invest in this business will likely be quite vast. Yet if you succeed it will certainly be worth it.
You need to be honest with yourself. You are now the boss, which means that when you fail its all on you. Heck when someone else fails in your business it is also on yourself. Firstly, can you handle that responsibility and secondly can you be honest enough with yourself to be able to spot your failings before they kill your company. Underestimating yourself is just as bad as overestimating yourself. Take an honest and regular assessment of yourself to ensure you are actually performing the best. Would you hire yourself for your company?
Most successful businesses contain more than 1 person. Eventually you will grow your company to a point that you will be unable to grow anymore due to having an insufficient number of people to do the work. When this happens, don’t worry it doesn’t mean failure it means you have hit upon success and a whole new batch of headaches.
Hiring people is a gigantic headache. Finding the most skilled workers is usually difficult because you are unlikely to have enough money to pay them what they want. Then on top of everything you will eventually find yourself having to deal with firing employees that steal or otherwise don’t produce. These are all pains that are absolutely required if you are going to build your business into something that can sustain itself without you being involved every single day.
The black art of marketing. It has to be the most essential part of building up a customer base and yet it is incredibly difficult to know exactly what to do. Marketers can only be as creative as the money allows so you will need to devote a budget to ensuring a regular marketing process actually occurs. If your business is anything other than a corner store you should target both online and offline markets to maximize your exposure. The most important part of advertising in any way is to track it every step. If you don’t know what your results are from an advertising campaign then you don’t know how to improve it.
Starting a business can be a huge undertaking, yet it can be the most rewarding experience of your life. Businesses, especially small businesses are huge creators of wealth so they can often be an effective track to success and riches if worked on correctly. Invest yourself in your business right and you will not only have a great business but you will have a lot of fun along the way too.