There are many things that I would like to have the opportunity to tell my 20-something self, and most of them would have nothing at all to do with small business! However, here are the 11 things I wish I could tell my 20-something self about small business and self-employment.
1. Follow your passion
Mark Twain once said that the key to success in life is “making your vacation your vocation” — and in my experience there is certainly a good deal of truth in that! If you do what you are passionate about in life, you will commit to it fully and be more likely to flourish. You will also experience the twin benefit that your business will not feel like ‘work’, but rather an extension of your passion.
Think about what makes your heart beat faster or what you would be doing if money were no object. This should provide you with some clues as to what your business should be founded upon, or which sector may be of particular interest to you.
2. Get educated and qualified
A formal education and qualifications are important because they can provide you with a fall-back career path. Indeed, a constant and unending commitment to learning is a key character trait of successful people, particularly those who want to experience sustained accomplishment in the ever-changing world of small business. You should commit to learning something new every day!
3. Model successful people
Probably the most important advice of all that I would give to my younger self is this: success leaves clues.
Instead of trying to be a trailblazer or reinventing how business should be carried out in your industry, you might just as easily observe what other experts have done in your line of work.
Why not resolve to model their key strategies, while simultaneously learning from their mistakes? It can be extremely enlightening to recognise that you may take shortcuts to positive results by learning from the actions and experiences of others.
4. Surround yourself with positive and like-minded people
There will always be naysayers who are prepared to pull you back, which might include anyone from friends and family to work colleagues or social media trolls.
Instead seek out like-minded, successful, positive people and surround yourself with them. Their positivity can rub off on you, and mutual support can be mightily beneficial.
5. Build upon and compound your successes
The 80/20 rule or Pareto’s Law holds that most of your results will be derived from a minority of your strategies, products, marketing campaigns and customers.
This does not mean making a few key decisions and casually ignoring the finer details of your business: 80/20 thinking is a far more empowering concept than that.
Instead of trying to be all things to all people, identify how and why your wins have eventuated, and double down on them by resolving to do even more of what works.
6. Small business is not 9 to 5!
Being a small business owner is not like having a 9 to 5 job! You have to live and breathe small business, which is why following your passion often makes sense.
For younger small business owners this may mean that you need to grow up quickly and take responsibility. In career employment, responsibilities can be shared around, delegated down or even passed up to your boss. Small business doesn’t tend to work that way. The buck stops with you.
Something I have learned is that it feels great to go to bed each night knowing that you have given your best in everything that you do — aim to do this all day and every day.
7. Keep fixed costs low
The higher the fixed costs in the early days of your business, the greater your chances of failure. Look to hire assets where you can: vehicles, office equipment and IT, premises, perhaps even people.
In the modern age, engaging contractors to perform discrete pieces of work can be a flexible approach to business, which avoids hefty recurring on-costs such as superannuation contributions and leave entitlements accrued.
8. Bill promptly
Despite what is implied by your annual accounts, whether or not a business is profitable or has a balance sheet that appears to be in a healthy net asset position does not determine success or failure.
Cash flow management is everything for a small business; businesses that do not thrive fail to do so because of a lack of cash. You must get paid for what you do — and on a timely basis. Invoice your clients promptly for work done, and always chase late payments.
9. Keep a tidy back office
Be proactive, not reactive, and of the key business tasks do your least preferred work first rather than putting it off (you will invariably feel better for having done so).
Ensure your monthly accounts, filing systems, official documentation, insurances, licences and tax returns are always up to date. Show me a successful business, and you will be showing me a business with effective administration and procedures.
10. There will be tough times
One thing that is absolutely guaranteed for all small business owners is that everything will not run smoothly. What separates the winners from the also-rans is how they respond to the tough times. Build resilience to survive and treat problems as stepping stones to success rather than failures.
11. Reputation is important
Build alliances, relationships and networks. As the old saying goes, it takes a lifetime to build a reputation, yet only a moment to ruin it. This adage applies equally to your business as well as your personal life.
For many small business owners your reputation effectively is your business. Always aim to over-deliver to your clients and your additional efforts will be repaid to you thrice over.
Learn these lessons early on, and your business will benefit!