Last week I shared some lessons I have learned about starting a small business. Starting a small business is an enormous and difficult task, but sustaining a business once it is off and running is a completely different ball game, requiring a different mindset.
When you start a small business, you muster up lots of energy and go to great lengths to get the thing started. The air is electric and full of excitement, and every challenge feels like a chance to conquer the world. But once the new-business honeymoon period has faded, what are you left with? Is your business sustainable in a way that allows you to live your life and take care of all you other roles and responsibilities with care and intentionality? Or does your small business have you in a choke hold?
Most of the time, small business owners live in a cycle of constant, never-ending stress. They’ve built a great business, but they also have created a trap for themselves, and extricating themselves from that trap can feel impossible.
When I started Hurley House, and particularly when I opened the brick-and-mortar storefront, I knew I wanted to find a way to own and operate a business without losing my life in the process. I knew the beginning would be rough, and it took several years of hard work to get Hurley House going, but when it was on its feet, sustainability became my goal.
Today I want to share with you some lessons I have learned about how to own a small business and sustain it in a way that allowed space for me to be a whole person. It is important to emphasize sustainability was not a reality for me for many years. If you are thinking of starting a business, I want to make sure you know that leading a “normal” life might not be possible for five or more years after you launch a business, particularly a store-front. This is a brutal truth, and it often gets glossed over or ignored altogether, but the sustainability timeline can be long. Building a sustainable business is a tough, uphill battle, and the best strategy is to mentally gear up for the long haul and commit to the process.
As you lean in and look for ways to create some space for normalcy, consider these lessons…
Profit First is the title of a book, and I wish I had know about it and put it into action from the very beginning. The profit first concept centers around setting aside your profits first and using the remainder of your revenue to pay the bills. Most people approach small business finances the opposite way. They pay the bills and then whatever is leftover is considered profit.
I know people who are turned off by the profit first concept, and that’s fine. There is more than one way to run a business. For me, when I read this book, it totally clicked. I have found the profit first cash management approach to be nothing short of magical.
One major aspect of sustainability is making sure your business can stay afloat without a sense of impending financial doom. Profit First has single-handedly transformed the health of my business and allowed me to create financial sustainability. As an added piece of advice, make sure you are working with an accountant who understands and supports the profit first approach.
Decision fatigue is real.
As a founder and business owner, you care about all the bells and whistles, all the details, the itty bitty ins and outs of your brand. Details can be part of the fun of owning a business! But from the viewpoint of a client, they literally don’t care about any of this, at least not at first. In fact, all of those details create decision fatigue, which in turn creates a negative experience for your new customers.
When a client interacts with your business for the first time, they are only interested in quickly figuring out what the heck you do and exactly what you offer. Your job is to remove as many mental barriers as possible in order for them to easily learn the basics of your service or good.
Why does this matter for sustainability? Because you cannot sustain a business that confuses people or appears to be too complicated. When a new person walks in to my store, their brain is scanning the room asking one question on repeat: “What is Hurley House?”
The client does not care about the backstory. They do not want to know about every flavor of every cookie or cake or casserole that we make. They don’t need to know every detail of every exception or special service or what we don’t do or how we do it or why. They need to quickly hear (or see) one, easy-to-latch-on-to sentence. Once that sentence lands, then they can handle more bites of helpful information.
At Hurley House, it goes something like this.
Our one sentence description for new customers is, “Hurley House is a full-service bakery.”
Instantly, this puts a new client at ease. People understand what a bakery is, and they can see the display of cookies, so it makes sense, even if they don’t know all the specifics.
Then, they look around and see a refrigerated case with chicken salad and garlic bread, which aren’t typical bakery items, so we continue with, “We also serve lunch, which you can eat here or take with you, and we offer oven-ready take-away meals.”
They now understand a bit more, and they are intrigued. Their brain is assimilating the information, and hopefully they are imagining all the ways they can now use Hurley House for their benefit. Cookies! Lunch! Dinner!
To finish our new-client spiel, we add one interesting and unique piece of information by saying, “We also have a drive-through window!”
Now they are really excited, and the conversation can unfold in any number of ways. Maybe they want to know more specifics about how long we’ve been in business. Maybe they want to know how to order a cake. Maybe they are really interested in the dinners. However it goes, and however many details we eventually discuss, it all began with a short, simple, easy-to-understand sentence.
My point is, this approach is intentional, and it makes Hurley House more sustainable because we understand and respect decision fatigue as a potential barrier to new business. We have created bite-sized pieces of information that we give new clients and gently guide them through what we do in a way that allows them to understand and not feel overwhelmed, and in the long run, this creates sustainability.
Over the years, loyal clients will learn more about the back story and the brand details. They learn all the menu options. They understand the full scope of everything we offer. But in the beginning, it has to be simple and easy to figure out. I got this very wrong at first. I tried to offer too many options, and I did not have a concise one-sentence answer to the biggest question people had when they walked through the door for the first time. Over the years, I figured out how to avoid decision fatigue, and the result is a sustainable way to welcome and educate new clients.
This same idea applies to anything a new client might view. This includes your website, your social media page, and your Google Business listing. Keep it simple and easy to understand, and always consider the decision fatigue of your client. Help them figure out what you do as quickly and as effortlessly as possible.
If you own a business, you need it to be profitable in order for it to be sustainable. Charging appropriately for what your offer is extremely important. I remember hearing a billionaire entrepreneur say that if he could give small business owners one piece of advice it would be to price their goods or services appropriately. He went on to say that most people are not charing enough, and they let their emotions determine their prices.
There is a sweet spot between devaluing your work and charging less than you should and being unrealistic and charging more than you should. When you figure out the right price, you will find yourself doing business solely with your ideal clients. The right price will benefit the bottom line of your business and you will do business with the segment of the market who wants what you offer and is willing to pay what you charge. It’s a win-win.
For the sake of sustainability, you need to know how to figure out what to charge. It’s not guess work. It’s math. You need to calculate how much you spend on ingredients, supplies, labor, and overhead. This is your base price. Then you need to add profit on top of that base so that you are actually making money. Small businesses are not hobbies! Making money is kind of the point, even if you are in for other reasons. If you don’t make money, you won’t have a business.
In the early days, it is easy to romanticize the process of doing whatever your business does and think the money doesn’t matter. But five years down the road? Chances are you will want a financial incentive to continue doing the work, and if you aren’t profitable, you might find yourself looking for a way out. Charge appropriately for your product, and this will make long-term sustainability easier.
As I mentioned in last week’s post, business owners don’t necessarily end up spending most of their time doing the thing that the business is all about. In my case, I own a bakery, but I no longer work in the kitchen. If I were to work in the kitchen, who would do all of the other tasks related to running the business?
Sustainability is going to require delegating in one form or another. You can either choose to stay in the kitchen (so to speak) and delegate all of the other business tasks, or you can delegate the metaphorical kitchen tasks to talented bakers so that you are free to focus on running the business. I chose the second option.
Why is delegation necessary for sustainability? Because as a small business owner, you are going to be required to wear a lot of hats. How many hats? Accounting, marketing, social media, photography, copy writing, product development, purchasing supplies, shipping, customer relations, web design, brand management, special appearances, promotions, facility maintenance, payroll, taxes, and human resources. There are so many different roles you will be in charge of, and notice nowhere on this list is the creation of the product or service your business provides! Running a business is a massive job, and no one person can carry all of this on their own forever.
In the beginning, we do what we need to do to make it all happen, and I wore all the hats on my own. But this way of life is not sustainable. I quickly delegated and discovered that when I delegated wisely, the business would flourish.
My advice is to decide what you enjoy doing and what you are uniquely good at, and then begin to delegate the other tasks. This approach will free you to focus on the special set of tasks that only you can do, and then allow others to focus on the tasks that you either are not good at or don’t want to do. At Hurley House, we call it owning your lane. When I focus on my lane, and everyone else focuses on their lane, then everything is done well, and we are all working together in a way that allows for long-term sustainability. At the end of the day, I am still the one responsible for all aspects of the business, but I am not personally in charge of wearing every hat every day.
The joy of owning a small business is that every day holds new challenges and experiences. But also…every day holds new challenges and experiences. Small business ownership comes with a lot of roles and responsibilities, and learning to make it sustainable is a challenge worth tackling.