Starting a new business as a freelancer or sole proprietor? Or thinking about buying an existing small business? Good for you — We need more small business owners! If you’re new to the small business arena, it can be both very tough and very rewarding. As you have probably heard, the staggering statistic is that 8 out of 10 new businesses fail within the first 18 months. In a great article on Forbes, contributor Eric T. Wagner shares some great insights here.
I want to add a critical piece to Prices wisdom: businesses that fail (especially sole proprietors) tend to do everything themselves, even those things that they SHOULD leave to a pro. Instead, successful businesses build a “power team” of advisers. No, this doesn’t mean you have to run out and add more people to your payroll as employees. Rather, think of these professionals as your board of directors…kind of a “rent-a-board”. After watching and studying several successful small businesses, here is my recommended power team:
I.T. Provider (Computer Consultant)
Now, a few points worth remembering:
If you are one of these, then you can “do it yourself” in that area. If you are a business lawyer, then by all means, write your own articles of incorporation. But retain the other five team members to advise in the other areas.
Make sure that the team members you retain are business experts. For example, a lawyer who handles criminal cases or family disputes may not be your best bet. You want a lawyer who concentrates in business issues: incorporation, employment law, etc. Your insurance agent should be an expert in business insurance, not personal insurance only. And so on for the rest of the “board”.
Don’t hire, retain. These “board members” don’t need to be employees. In fact, if they were, they would be your most expensive employees — Their knowledge is what will enable you to succeed! Instead, pay them a small retainer and and ask them to meet together with you at least once or twice a year, if not every 90 days. Expect to pay each a professional hourly rate for their time for each meeting and any preparation for the meeting.
Meet together. I’m talking about meeting with all of them in the same room at once, not six individual meetings. Meet together 1-4 times annually to plan and shout discuss changes in your business. Why together? When you make plans or changes in your business, it rarely affects just one area of expertise. It often touches 2, 3, or more. Here’s an example: Let’s say you are preparing to purchase a high volume copier/printer/scanner for your office. Your accountant can advise you about the timing of the purchase so as to receive the best tax benefit, as well as help you amortize the cost over multiple years. Your financial planner can help you determine how to finance the purchase: cash, commercial lending, special loan or grant program, etc. Your I.T. consultant can help you determine which model will be compatible with the critical software and systems you need or already have in place. They can also help you ensure that your purchase is able to be connected to your computer network. Your commercial insurance agent can assess the risks and help you insure your new purchase properly. See? Teamwork!
Meet with your power team individually as needed also. If you have a contract to sign, then call the lawyer…no need to gather the team for a quick item. Leverage your team for the big things.
Ask for education. Maybe your power team members can each prepare a short presentation for each of your meetings. Or rotate among them each taking a turn presenting at one meeting out of six. Either way, the idea is that their knowledge of new industry trends, changes in employment law or tax law, or changes to risk management can all benefit your business.
Even as you learn from your power team, play to your strengths and let your company grow by playing to theirs. Rely on your I.T. consultant and your virtual assistant to handle the details of your business so that you and your employees can concentrate on sales and delivery of your products or services. Your virtual assistant can keep your booms and work closely with your accountant to prepare you for tax season each year. He or she can also handle your marketing, newsletter, social media, and email blasts. The virtual assistant will also work closely with your I.T. consultant to optimize your website and leverage search engine optimization (SEO). Your I.T. consultant will ensure that your email is set up and working the way you need. He or she can advise you with respect to mobile devices: tablets, laptops, smart phones, as well as how to best apply your budget to maintaining and replacing workstations, servers, printers, and so forth.
By assembling your power team as described above, and following the above recommendations, you catapult yourself and your business into the top 20% that not only stays around after 18 months, but continues to grow and succeed after that. I hope and believe you will find benefit from these simple but powerful ideas. And I can’t wait to hear from you about your business successes.