3 Things Every Business Owner Should Know
As a small business owner I've learnt a lot over the years. Some of the best things I've learnt have been through the mistakes I've made along the way. I don't feel (too) bad that I've made mistakes, I just don't want to repeat them.
Looking back a lot of it was pretty obvious, but when you find yourself running a business in your 20's some of it is definitely not obvious. I'm now in my 30's and still making mistakes, just not as frequently as I used too.
Just to be clear, this is some of the advice I wish I could go back and tell my younger self. Your milage may vary.
1. There's nothing wrong with being small
When you've been going it alone for a while and you finally start turning a profit, there's a temptation to hire staff and find an office so you can finally be a "real business". It's the natural progression. You get an office, and you hire some people, but it's not enough. You start thinking perhaps you need X number of staff and a bigger, fancier office to be classed as a "successful business".
The more staff you have the more impressive your company sounds, that's how most people on the outside view it.
I fell into this trap. I thought to be successful I needed to grow my business, get a bigger office, hire more people. And why not? We had the turnover to do it, so I did. It also just seemed to happen organically. One day I looked up and I was responsible for 10 full-time employees, a whole host of freelancers, and an office big enough for 30+ people. Unchecked a business can take on a life of it's own. I didn't plan for it to be like this, it just kinda happened.
The more staff you have, the more politics there are. You go to the pub and suddenly you can no longer all fit around a table, splinter groups start to emerge. You get a bigger office, and the overheads suddenly ballon. All of this leads to more stress and more pressure. Maybe some people get a kick out of it. I've found running a smaller, more intimate company is much more enjoyable. I'm not saying don't hire people or don't get an office, I'm just saying think carefully before you do.
I don't want to end up running a business that kills me. I love my business now more than ever. I want to continue running a profitable business, one that provides well for its employees, and is a fun and relaxed place to work. You need to be ambitious, but not so much so that it makes you sick. Burnout is for losers.
My business is just as profitable now as it was when it was bigger. Being small has many advantages. Just because a company is bigger, doesn't mean it can ship products more regularly. If anything there's a tipping point and things become slower. A side affect of growth is more process and more meetings. Small, agile and profitable is good, and dare I say it, a better place to be.
Think carefully before hiring anyone full-time. Think very carefully before getting an office, think about the longer term and where things are going. Do you really want the overheads and all the other stuff that a bigger business brings along with it. Sadly you probably won't fully appreciate how hard it is, or what that entails until you've been there and done it for yourself.
2. Build complementary products
This might be business school 101, but like most business owners I didn't study business so have had to learn the hard way. In most cases you should build products (or apps) that compliment each other. Products that target your existing customer base. It's much easier to pitch a new product to a market you already know. It's easy to think you should diversify, but by diversifying you split your attention and your focus. It's risky and doesn't often pay off.
A photography app and a to-do app are aimed at different markets with little overlap. There's an incredible overhead that comes with developing products in different categories that don't compliment each other. For example, there's very little common code, design and customer base that the two apps share. However, if you were developing a to-do app and a calendar app, there would be plenty you could share between the two products. Having similar products allows you to iterate faster, ship more often and serve your existing customers better. Focus on a niche and try to own it.
My company is still guilty of having different product lines that don't benefit the same type of customer. I'm slowly changing things so all of our products fall into one major category. This change will take some time, it's not going to happen overnight but we'll get there. I just wish I'd figured it out earlier.
MacPhun is a perfect example of a company taking the complementary product concept to the absolute extreme. They just build photography software. If you need to do something with a photo, one of their apps will probably do it.
3. Employees will leave. Don't panic!
When I first started hiring people it was all very new and exciting. The company was finally growing after many years of just me working alone. I was looking forward to getting more people onboard so we could do more, build better products. I certainly wasn't qualified to interview and hire people, but when you run a company by yourself, it's down to you to hire people. In the first few years of hiring people I honestly never once thought that these people might one day leave. It just never crossed my mind.
The first few people I hired were in a somewhat haphazard fashion. An informal interview, a drink down the pub and that was it. Welcome aboard! A lot of the time I just went with my gut instinct. Thankfully it all worked out. I've been very fortunate to have had a succession of great people to help build my business into what it is today.
Anyway, fast forward a few years and the company had grown to around 6 full-time employees, things were going well or so I thought. Then one day Aron said to me "can we have a quick chat?". Not thinking much of it, I said "Sure, what's up?"
He then told me he was leaving and handed me a letter of resignation.
I was calm as I listened to his reasons why, but man it was painful. When you've built a small company, it feels like you're just a bunch of friends building some products, it's all very personal. Later that evening I remembering thinking "Oh crap, how am I ever going to replace him, what the hell am I going to do now!". This was swiftly followed by me asking myself, "why would he want to leave? what if other people leave…", needless to say, this was all rather unsettling.
I got over it, you have too. The business adapted and changed, and things worked out. When someone decides to leave a business, it's a waste of time trying to convince them to stay. They've made up their mind and if they stay they'll end up being unhappy and resent you and the business.
Sometimes when people leave they just don't want anything to do with you, and that's sad. Perhaps it's a bit like when lovers break up. I don't know. I stay in contact with Aron and a few of the others that have left, and I like that.
When someone leaves a business it's a great time to evaluate things and look at the bigger picture. Don't automatically rush to hire a replacement. Perhaps the business has changed over time and you'd like to move things in a slightly different direction. Try to make the best out of what can be a stressful time within any small business and use it to your advantage.
Please feel free to share anything you've learnt while building your own business in the comments below.