Small Business Endurance

Running a business comes with big responsibility.  From creating a service, procurement of goods for sale, marketing, sales, customer service, actual deliver of goods, execution of the service, managing employees, ensuring compliance to monthly/quarterly/annual government requirements, networking, doing proper accounting and so on. With these abundant responsibilities shouldered by many micro and small business owners, no wonder why sometimes one think of just quitting and closing the business, then just go back to being employed.

I’ve seen that a couple of times over the past decade as we are providing business services to micro and small businesses. Such as when a new business owner comes to our office, excitedly beaming of the idea of registering their first own business and asking for our assistance in the registration process. Only to meet them again, after a couple of months or years, asking us again for assistance, this time to close down the business we just registered a few years or months back. And you may be asking why? 

There are many reasons but let me tell you two: first, they didn’t expect that operating a business will be that hard. They thought being your own boss means more time freedom, but only to find themselves working even longer, with less and less time freedom. They were not up for the big sacrifice and responsibility of running a business. And lastly, they were not prepared financially for the cost in running a business, both short-term and long-term. They only planned for few months operation and expecting the business’ sales to take off, use that to fund the business months forward. But the sales sometimes don’t take off as expected, then the struggle with keeping the business finances from falling down starts. 

Couple of years back, I’ve read from a business book, that in average, only 25% of small business survives the first three (3) years of operation. What happens to the 75% of small business? They get extinct. They don’t survive and cope up with the big responsibility of running a business.

How Do Small Businesses Endure?

There is no guaranteed answer to this question. The world keeps on changing and it’s unpredictable, as such, it will be hard to give a definite answer. However, let me tell you our own lessons learned that we applied which have help us endured through the years since 2011. 

This may seem a bit motivational article, but at the same time it’s also the reality that we applied that helped us still exist for almost ten (10) years now. The list below doesn’t list all the lessons we’ve learned but only sharing three (3) for the reason as not to take too much of your time. Test it and see if it will work for your business too.

1. Be Scalable

Before you even start a business, think of its scalability. What is scalability? According to www.investopedia.com, Scalability is a characteristic of an organization, system, model, or function that describes its capability to cope and perform well under an increased or expanding workload or scope.

In simple explanation, you need to establish from the beginning if your business has growth potential and think of how you will scale it.

To be scalable, you have to established systems and SOPs (Standard Operating Procedures) that can be easily taught and applied by people you will employ or partner with as you grow the business. It’s also important to note that system and sops should be simple and eliminates complexities.

2. Be Adaptable and Innovative

Being adaptable means your whole organization (owners and employees) ability to adjust easily to new circumstances. Make your business ready to adapt, if not adapt earlier or ahead of everyone else. That’s a sure way to stay relevant. As we know, the world is constantly changing, the same goes with business operations management. What we do normally now in our business maybe a lot different from what will be normal five (5) to ten (10) years from now.  Example of this is the current set-up of work-from-home being adapted by many companies nowadays. A decade back, when you tell people you are working from home, they will frown and think you’re just a lazy-good-for nothing who just does not want to work hard. But things are very different now, people will frown and avoid you if they knew you’re working outside your home, for fear you have the virus. 

Another is be innovative. Being innovative means early to use or create new technologies ahead of everyone else. An example of this is online marketing.  Again, my example is ten (10) years ago, online marketing was not existent to most businesses. Many are still investing large amount of money to traditional marketing platforms such as flyers, TV/Radio Ads, Print Ads in Newspapers, magazines, etc. But now, ten (10) years after, only few businesses are not yet in online marketing or social media. 

To be adaptable and innovative, you have to keep up to date with new technologies coming out and think how it can impact your business in the short-term and long-term. Then if it’s useful, think of how you can avail and implement that in your business.

3. Manage Your Finances

Last but not the least, is to properly manage your accounting and finances. Being scalable and innovative are all will go to waste if you are poor in managing your finances. 

In order to properly manage your finances, first, establish proper tracking and record keeping of your financial transactions: what’s coming in (inflows) and what’s coming out (outflows). Then, use that regular financial reporting and analysis to decide how to run/adjust your business operations in the next months or years to come. If you need assistance here, we can assist you.

Running a business is tough. You need plenty of persistence as an owner to help your business endure through time.

As Jim Collins have said in his book, Built to Last:

“When in doubt, vary, change, solve the problem, seize the opportunity, experiment, try something new (consistent, of course, with the core ideology)—even if you can’t predict precisely how things will turn out. Do something. If one thing fails, try another. Fix. Try. Do. Adjust. Move. Act. No matter what, don’t sit still.” 
― Jim Collins, Built to Last

Wishing you all the best of luck! 