Invest in Yourself and Your Business
A common mistake that small business owners make is failing to take the time to invest in themselves and their businesses, prior to startup and during growth of the business. Anyone who has ever been in business realizes that as a business starts, owners are caught up in the day to day grind of operations along with the hectic pace involved in doing everything alone. Much like the commercial on television where Dave continues to run into Dave or call Dave for help, business owners are the managers, janitors, sales team, bookkeepers, and marketing staff. The stress of growing the business is as challenging as startup.
Unfortunately, years later, those same owners may not be ahead in the sense of investments, industry changes, trend shifts, market changes, or business analyses. As life “happens” these people continue to struggle to make ends meet. Often their families have made financial demands on them and they feel like that proverbial man who meets himself, coming and going, trying to make the donuts. However, in their defense, these folks have had to learn through the school of hard knocks and they know “what they know”. This can be bad or good, depending on the perspective, since they may not know what “they do not know.”
One thought is “If it ain’t broke, don’t fix it!” Business owners continue working, year after year, building or maintaining their business so they do not feel they have the time (or need, in some cases) to go through training, seek business advice, or again, invest in their business. Unfortunately, this mistake may not be recognized by the business or owner until it is too late – the business is hurting, the economy is putting pressure on them, or the owner is going through major health issues. When disaster hits, they begin to flounder. Too many of them put their financial needs on credit cards and soon their credit suffers. If they are asked what the problem is, they may have a sense of it but could not be 100 percent sure. Usually, they blame the economy, customers (or lack thereof), or their market.
When forced to analyze the business with a professional, they might learn that their products or services have never been priced high enough. Therefore, they have been working a whole lot harder while getting a lot less on their investment (production, in this case). It could be they do not know their profit margins or that their operations are higher simply because of the workflow process. Those businesses that started without professional business advice are more likely to continue operating without outside input as well, and they might never know that with a little help along the way, they could have learned tips on streamlining operations, techniques for identifying strengths and weaknesses, ways to find opportunities in the community, or learned how to restructure in a way that was timely but not costly.
Lenders will agree that they see far too many businesses when it is too late to help them. Call it stubbornness or too much pride, but businesses will often wait until they have no other avenue before seeking help.
It is wise for a business owner to get a fresh new look at their business (through someone else’s eyes) at least once a year. They should be networking in the community to find out what other businesses have to deal with and to connect with people. Working constantly in the business is not a good place to be if the business wants to be successful. It is important to look outside of the business for ideas, to hear war stories, and for a breath of fresh air.
People should never go into business without a plan to be as good to themselves as they would expect a boss. With that said, they need to consider buying life insurance, health insurance and investing in a 401K plan for retirement. It is amazing how many businesses (being opened for 10 years or more) do not have any of those things in place for their owner. These types of investments are assets for the owner. If something happens to the owner, what is going to happen to the business (at least in its early years)?
It is evident that investment comes in many forms. A business needs to have an emergency fund to support itself in case of a disaster like when a large piece of equipment fails. The same business needs to be able to provide raises to good staff members along with benefits. These things cannot happen unless the owner knows how to keep costs at an acceptable percentage of sales or how to increase cash flow and profit.
Life is an education, but other forms of learning are just as important like business and technology training (technology changes constantly along with software). Business professionals allow owners to have a sounding board and offer advice on how to streamline processes, market via e-commerce, and a multitude of issues that will help the business and make life easier for the owner. Business owners need to adjust their thinking and invest in themselves and their businesses.
If you’re an existing business owner in the Las Cruces, New Mexico area, consider taking some classes from WESST’s Invest in Yourself Invest in Your Business training series. At just $20.00 per two-hour class, it’s definitely a good investment in your business.