At Workbea, we believe in sharing our knowledge, frequently for free. Of course we want to make money from our consulting services, we also want to be a resource for smaller business owners who don’t have the budgets to secure expertise at this stage of their journey. Since 70% of the US workforce is employed by small business, yet 90% of new small businesses fail within the first two years- we feel compelled to do our part. We want to help startups stay in business longer and beat the undeniable odds against them. It’s actually our civic duty as business consultants and a social responsibility for all in our field. When one is raised, many are elevated.
We’ve compiled the most frequently asked questions we get from our startup clients and the hundreds of small business owners we engage with every month. Please share and help save the small business world!
- “I’m working full-time at a day job, how can I ramp a side hustle enough to quit the day job and do my business full time? This is a very common question on first consultation calls. Here’s the advice we give. Have a business plan in place with a well vetted opportunity analysis. You should know what your available market is, the opportunity in dollars, and financial goals tied to winning those opportunities. The financial goals have to be realistic and increase month over month or quarter over quarter towards replacing your current income and include very specific plans as to how you’re going to do that. Sounds easy enough, right? Hold on, there’s a caveat- the plan, the vetted market analysis and the financial model takes a great deal of time to complete. Most entrepreneurs want to hop out of the gate and start ramping- the problem is, without a solid plan, the pitfalls of unforeseen circumstances usually crush the effort. The two most common reasons most new businesses fail is they run out of cash flow before they ramp and they run out of sales after they go through all their friends and family. Fail to plan, plan to fail.
- “How do I get new clients?” An entire book could be dedicated to this subject, without going too deep or overwhelming a client we simply answer the question with a question. Do you want to make more money or just want new clients? Most of the time the answer is, I want to make more money. Getting new clients is just one way to grow your business, there are countless other ways to increase revenue. Start with existing clients by offering some add on services- then incentivize them to refer you to their peers, friends, and family. Done. Of course you can take the much longer road of networking, courting, cold calling, and prospecting, while this can be pretty effective, it also takes time. Time is not your friend as a start up. You need the quickest path possible to sales without working 200 hours a week. Expand your service or product line with existing customers, deliver with excellence, and then get referred.
- “When is a good time to hire the first employee?” Before we answer the question, we always revisit the financial plan. Your financial plan should have that answer for you. You’ll need to meet certain revenue goals in order to bring on staff. A good business plan has x amount of “startup” funds dedicated to things like marketing, accounting, logistics and technology. Don’t try to set up all these things yourself to save money. Understand what you’re good at and outsource the rest- otherwise you are a never ending student in all areas for long periods of time- in other words a jack of all trades and a master of none. Start ups don’t have time to learn how to keep an accounting ledger or maintain a website- the focus must be on revenue generating activity in order to stay alive. Focus on what you’re good at and outsource the rest. It may cost a few cents more in the short term, but it can reap big long term rewards- like future sales.
- “What do I need to do to sell online?” Get the laundry list out! All the ads and DIY e-commerce commercials are very misleading. Launching an e-commerce initiative without understanding how to rank on search engines is like opening a store front in the back room of your uncle’s garage out in the country- no one will know you are there. Selling online is the same, you have to get traffic to your store. Hire a professional to help with search engine rank and website optimization. They can help you build online presence, authority and put your e-commerce site on the map. If you’re not showing up on Google, you don’t exist. So before you sign up for WIX- get the expertise to do it right and your chances of success will dramatically increase.
- “How long does it take to make a profit?” The statistics say it takes businesses an average of 3-5 years to make a profit, we don’t advise waiting that long. Build profit margins into your pricing so you’re profitable on day one. Use your start up money to fund equipment and marketing- margins should pay bills, pay yourself with a little left over to sock away. Never undersell your product or service just to get the sale. Customers who go with the lowest price will eventually leave you when you actually charge them for what the service or product is worth. You’ve worked a long time to acquire your special skills, you’ve decided to go into business for yourself because you felt you can deliver something better or exceptional. Essentially, you’re an expert at what you do- expertise, skill and quality work is never free and rarely cheap. Charge competitive prices, offer tremendous value, deliver with excellence- never compromise that.
- “Can I fund growth with credit?” You sure can- do the homework on options and interest rates so you’re making an informed financial commitment. The other side of the story is equally important, have a solid plan as to how you will pay off the debt. Go back to the financials (do we sound like a broken record?) and know how many more sales it will take to pay off the creditor while maintaining your profitability. There are some good worksheets out there that will help you analyze the numbers. As far as where to borrow from, start with your current bank where you have longevity and relations with. What you don’t want to do, is buy an expensive piece of equipment for one or two jobs and not use it for anything else. You’ll have this beautiful state of the art widget sitting in your warehouse and you’ll be renting space from yourself at a premium to keep it there. Know the numbers, do the research, have a plan for pay off.
- “How can I plan for future growth?” We encourage all our clients to have long term and short term goals. In order to meet those goals you’ll need to forecast like a champ. Accurate revenue forecasting will give you the ability to plan better. If you can get very close to or exceed your forecast, you’ll be able to manage the puts and takes on the P&L much better. Good forecasting helps mitigate risk, helps you foresee cash flow problems, and allows you to grow gracefully. It’s an acquired skill gained by understanding your market, your customers, your industry, and yourself. Understand where your industry is going, are there trends indicating a spike or a decrease in the demand for your product or service? Are there indications the market is changing or is there a disruptive technology on the horizon that will make your product obsolete? Can you anticipate your customer’s needs? Are any of your clients moving out of state, retiring or selling thier businesses? Are any of your clients growing rapidly and will they demand more product or service? All this can affect revenue, proper forecasting is really about gaining intelligence so your numbers are realistic and attainable. Without all this information, your forecast isn’t a forecast, it’s just some numbers on a spreadsheet entered in under the influence of HOPEium.
These are just a few of the questions we commonly get from clients who are just starting the entrepreneurial journey. If you’re a start up and need some no nonsense advice from people with expertise who traveled your path at one point, contact us. You can make excuses or you can make progress. Headquarters in Niagara Falls, NY. Services delivered Nationally. Workbea provides essential back office services and technology tools that minimize administrative tasks. We use the power of Google to provide small businesses with a centralized, customized approach to collaboration, productivity and marketing that facilitates growth and new customer acquisition. Got big goals? Get there faster with us.