For the better part of the last 20 years I’ve chosen small business endeavors over a 9-5 corporate routine. My short time spent in the corporate world wasn’t terrible, but I felt that my more creative impulses and need for variety would be stifled if I stayed in that atmosphere for any length of time.
Since then, I believe that I have seen enough through my participation in more than 10 small businesses of varying styles and degrees of success and failure to offer a few observations. I won’t cover each business, but instead will offer what I hope are some helpful generalizations to prepare yourself for the high-risk high-reward world of entrepreneurship in small business.
A key component of any business, especially over the 10-15 years, has been the many ways that technology has transformed the tools we use to communicate with our customers, manage our day-to-day activities, and enhance what we are able to offer. I began my small business journey in the retail sector with an entirely inventory-based business with a single partner who fortunately had some experience with what we were selling. However, this was nearly two decades ago ago and his experience dated back even further, which put him firmly in a manual mindset for business management. Whether it was accounting, bill payments, payroll or marketing, things moved at a tedious snail’s pace. New tools had been developed such as invoice templates and computer accounting packages like Quicken. Coupled with this were the burgeoning online offerings that could expand the range of brick-and-mortar businesses through websites and e-mail that could enable newsletter delivery, special offers and event scheduling. I remember how the integration of all of these technologies gave us a feeling that we were a much bigger presence than our 2,000-square feet of anchored space.
After 10 years in retail with 10-12 hour days, virtually no real vacation and certainly no holidays, I became increasingly interested in the many new technologies that empowered people to work from home. We sold our brick-and-mortar shop, went our different ways and I embarked upon the path that led me to where I am today — writing from home where I can deliver information and earn income from an array of diverse online small businesses that I am involved with.
To be sure, the online businesses of today are still fraught with the many perils faced by brick-and-mortar businesses depending on the scope of the offering, which leads small businesses to have extremely high failure rates regardless of their positioning. However, the technology of today greatly minimizes risk if a few key areas are addressed.
From my experience, the number one pitfall (among many smaller ones) is over-investing — and this can happen at any stage of a small business’s trajectory.
In the brick-and-mortar world, this is incredibly easy to do even with the most frugal of mindsets. All of the start-up considerations such as property purchases or rent, decoration, signage, business cards, business equipment and more can put a business into an insurmountable hole of debt right out of the gate. Moreover, inventory-based businesses such as the one I had were a constant balancing act to keep from overextending month to month. The main challenge here is that it often takes years to understand traffic and sales numbers so that ordering products can be done with precision and top profitability. If these products are perishable, it adds a further layer of complexity and punishment for miscalculation.
These aspects of product management and accurate profit calculation are so much easier in the online world where virtual stores can be created to offer a massive array of products without ever needing to physically build anything, or ever even hold products. Built-in profit tracking and customer analytics make this a breeze compared to the trial-and-error cycle normally required. Stores can be built fully online, and items today can be ordered and dropshipped with services like Amazon and Shopify. Sites like eBay and Craigslist have further enabled anyone to dip their toes into product sales and business management with very little risk.
The digital media side of modern small business – such as this website I’m currently writing for – can offer the utmost in flexibility, portability and adaptability. It’s a feeling of freedom that in my experience is unsurpassed — the knowledge that I can open a laptop from anywhere in the world that has an internet connection and earn a living. Writing articles, creating videos, building social media, offering ebooks and newsletters, and sharing information with millions of people is almost taken for granted in this day and age but is incredibly liberating once the basic (and often free) tools are understood.
Yes, my current days working from home can often be equally as long as my former retail days; and, yes, all businesses can succumb to unpredictable external forces no matter their size and scope. But the technology of today can keep a business right where it needs to be in order to create the best conditions for success: lean and mean, and quick and nimble. There has also never been a better time in history to utilize the many tools of technology to minimize the inherent risks of small business, maximize profits and ensure long-standing success while remaining as free as possible while doing it.
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