Don’t Run A Small Business Like A Big Business
Small businesses have different needs and opportunities than big ones – don’t try to run them the same way!
We often start small businesses with the hopes of turning them into big businesses – we want our projects to succeed and grow bigger. It seems natural to look to big, successful companies to learn tricks for running your own business. If it works for tech juggernaut Apple, why wouldn’t it work for your startup computer repair shop?
The reality is that many of the day-to-day aspects of being a small business CEO differ greatly from the daily lives of CEOs at larger blue-chip counterparts. While general business values may be the same – careful planning, budget management, building relationships, and marketing are valuable no matter the size. And at any size, the job of the CEO is to keep the business running. But what that actually looks like is very different at small and large businesses.
At the end of the day, a small business owner is going to be right in the weeds. You’ll be personally dealing with customers, suppliers, and the actual work being done. You’ll personally hire any employees, manage your bookkeeping needs, create your business plan and budget, and get the funding you need. At a big company, there are whole departments of people dedicated to each of those tasks. A Fortune 500 CEO can’t possibly be involved in every aspect of the business – there’s just too much going on! Big company CEOs are going to be more focused on overall strategy and making sure everyone is pulling in the right direction.
We may dream of being big CEOs, but acting like them can put our businesses in serious trouble. Here are a few things to watch out for:
Management Is Not Enough
CEOs of large corporations have trained support staff and round-the-clock administrative teams to assist with all day-to-day business needs. They can focus on managing their employees and operations from a high level. Small business CEOs still need management skills to deal with strategy, supply chains, budgeting, employees, and other issues. But you’ll also need to be able to do the customer-facing work. The CEO of Betty Crocker doesn’t need to be able to make a cupcake (or even boil water!). If you run a bakery, on the other hand, you’d better be able to use that oven!
Know from the outset that you, as the small business owner, will be involved in everything. Big business CEOs have to focus on high-level issues – you need to be focused on everything from the ground up. Don’t jump straight into management and lose sight of your actual product or service. And staying involved at the lowest levels will also make your business better – it’ll help you keep in touch with your customer’s needs.
Slow and Steady
Fast growth is tempting – it’s hard to be patient when you’re putting this much work in. And that means you may start looking at more space or the newest and shiniest equipment before your business can really support those investments. Big companies can afford to take big loans (and bigger risks) because they already have an established credit record and cash flow to back it up. For a small business, however, every buck counts. Trying to grow too fast or aggressively can land you with a bunch of debt you can’t pay off and a bunch more equipment, space, or supplies than you can actually use.
The same goes for employees – it would be really nice to have someone to answer your phones, bring you coffee, and handle a million other tasks. But hiring an employee is a big step for a small business and you shouldn’t do it until it’s necessary. And when you do start hiring, it won’t be someone to help you manage your calendar – you’ll need people that can do the hard work on your products or services and help you grow.
Create your budget and stick to it and make sure you’re not borrowing more than you need. Keep an eye on your natural growth and start looking into expanding when it’s clear that you’re going to exceed your capacity – not before.
All big businesses started as small businesses. But small businesses are fundamentally different from the big ones. Running a big business means acting as a CEO in the sense we often see in movies – making high-level decisions about the direction of the company and getting overviews of budgets, operations, and advances. Running a small business means you’re going to be a jack of all trades. It may not be glamorous, you may not be anyone’s boss, and you may be putting in a lot of grunt work – but that’s exactly what you have to do to make your small business successful. Once you start to grow, then you can thinking about setting up that corner office!