Summary: In today’s episode, Stephen Halasnik and his guest Barbara Alves discuss the difficulties that business owners have at new revenue levels. As exciting and thrilling as having a new business can be, it can also present some of the biggest challenges while passing different revenue levels. For small businesses, the challenges that come with success can be resolved in various ways, some with simple adjustments. Depending on your business industry, you will be faced with various challenges. However, these are some essential tips that all individuals who own a small business or startup should keep in mind.
Summary
What Happens at the 1 Million Dollar Mark?
There is no doubt that when you finally hit that million-dollar milestone you will be excited. However, that satisfaction comes with some minor tweaks and adjustments you are going to want to integrate. The behavioral shifts in your business will be small, but this will be a major opportunity for you to start laying down foundational changes. These major foundational changes are huge, and if you miss this step you could hurt your business in the future.
As things grow they can oftentimes seem overwhelming. For small business owners, this can perhaps translate into working longer days and more hours. This can lead to exhaustion and burnout. Instead, you want to make changes in your business plan and business model. This will include gaining new employees in order to help you keep up with the work that is increasing. With increased sales comes increased client demands and making sure you can meet those demands. In addition to more customer or client demands, the operations in the business will increase. This could look like more invoicing, payroll, contracts and paperwork to review, accounts receivable, etc. Expanding your team should be viewed as an asset instead of an expense, as they are going to help you grow.
In addition to this, you want to take a step back and analyze things such as client retention, and if you are retaining or losing employees. Also, you want to be able to gauge your customer satisfaction, how long it takes to fulfill orders, and things along that line. It can be a challenge to keep up with the pace of your business growth, especially if the management side of things is not on track.
At this time, you also want to pay great attention to your income statements and analyze your profits and losses. At this point as the sales are starting to go up, you want to ensure that you are on top of your bookkeeping. Perhaps that looks like hiring an account, or a team of people to keep your books aligned. In the first year of a business, it can become easy to overlook how critical keeping organized is, however you never know how fast your sales will skyrocket so you want to be on top of it.
Approaching the 3-5 Million Dollar Mark
As a business owner who approaches the next tier or revenue level, you want to focus on expanding with a purpose-filled team. With the growth of your business, you want to start working on your business and less in the business itself.
As businesses expand, it can be easy to fall into being a micromanager, but at this point, you are going to want to have a solid foundation and team to help you. Business owners tend to be more of the “visionary,” so sometimes it can be best to stay away from the management side of things. You are going to need to hire a business leader(s) who will be able to help fulfill your vision. In saying this, if you’re going to push toward the 3-5 million dollar mark, you need to have impeccable hiring skilling. Getting employees is an easy task, but getting the right employees takes time and skill. Knowing how to hire right is not only going to support your business, but it will help avoid various common problems.
Similar to many large businesses and large corporations, you are going to need detailed job descriptions, metrics, qualifications, etc. In addition to being a qualified employee, you want to ensure the individuals you hire are a good fit for your company culture. This will be different for every business depending on what your mission and values are, but you want to ensure that your team members will be able to achieve that with you. The reason why many small businesses fail is that they aren’t composed of people that can keep up with the rapid growth and needs of the business. A successful company is only as good at the people that make it.
Common Mistakes to Avoid for Business Success
With all that being said, hitting various revenue levels does not always come easy due to the many hurdles that can be presented along the way. In the early stages of owning a business, you want to avoid implementing processes and practices that are going to do more harm than good. Some of these could include:
- Trying to do all the work yourself
- Spending too much time in your business, rather than on your business
- Micromanaging for too long
- Unnecessary hires/ hiring the wrong types of people
- Not getting the proper financial resources
- Thinking short-term instead of longterm
Conclusion
Overall, growing a business can come with many difficulties. Individuals start their own businesses for various reasons, but it is important to keep in mind that things change along the way. As your business grows and evolves, so will you. The person who initiated your startup will not be the same person when you are looking to get past the three or five-million-dollar mark.
For small companies that are gaining new customers rapidly and things start to grow, you will have many different challenges that will need attention. The key to being successful is being able to handle those challenges as they come, or better yet stop them before they happen. Whether it is a new product, your marketing strategy, healthcare, social media, etc, you want to be prepared and ready to be an adaptable business owner.
About The Guest Barbara Alves, JJ Miller Inc
Barbara has over 30 years of experience in all aspects of business growth, management improvement, and customer retention—hands-on experience!
Barbara opened JJ Miller, LLC as a business management consulting firm dedicated to the growth and progress of small businesses.
Barbara wants her clients to benefit from the lessons she learned from her own successes and failures—from her start in customer service to her years as a Chief Operating Officer. That’s why every client engagement starts with first understanding the vision and aspirations of the owner or leadership team. And if they have gotten a little muddled over the years, then Barbara will bring them back into focus!
About The Host Stephen Halasnik, Financing Solutions
Stephen Halasnik is the host of the popular, Entrepreneur MBA Podcast. The Entrepreneur MBA podcast’s purpose is to help small businesses get over the $10 million per year in revenue mark. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to small businesses and nonprofits
Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik has started and built 6 companies over 25+ years with 2 of those businesses making the Inc 500/5000 fastest-growing list. Mr. Halasnik is a best-selling Amazon author on business and regularly tweets about his ideas about growing a business. You can also find Mr. Halasnik on youtube talking about Entrepreneurship.
Mr. Halasnik loves small businesses. He lives in New Jersey with his best friend, and his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.
About Financing Solutions
Financing Solutions provides an easy-to-setup unsecured business line of credit to small businesses. The small business financing product is a great cash backup plan that costs nothing to set up, nothing until used, and is inexpensive when needed. Financing Solutions is rated A+ by the Better Business Bureau and 5 stars by the BBB/Google Reviews.
Unlike a traditional business bank loan, our business credit line requires no collateral or personal guarantee (except in cases of fraud) making it an excellent alternative business financing option. Small businesses often used their line of credit for short-term expenses, working capital, to make payroll, or for a business investment especially when business cash flow is temporarily down.
Get a free, no-obligation business line of credit quote by filling out our simple 2- minute business line of credit application here.
Remember: The time to set up a credit line is when you don’t need it.
Note: Financing Solutions donates 10% of its profits to various nonprofit charities