Entrepreneurs who have successfully launched their venture hit an inflection point after their idea is off the ground. Once things are going and moving in the right direction, the “Manage It” stage of the entrepreneur journey is where all the pieces of the business get balanced and optimized and small business management comes into play.
Small business management is the process of optimizing all aspects of running a sustainable venture — including finance, marketing, product development, customer management, leadership, business planning, networking, decision-making and ongoing growth.
In addition, individual skills such as time management and personal productivity are required to successfully manage a small business.
In looking at the list above you might think, “This is a lot of stuff!” Yes, yes it is.
Yet these are the things an entrepreneur must consider to move their venture forward.
The things that are needed for entrepreneurial management differ from the tasks associated with entrepreneurial venture creation and initial growth.
Running a venture that is sustainable over time requires balancing many competing priorities.
5 aspects of small business management
Small business management covers many areas, including:
- Small business finance.
- Customer retention.
- Small business networking and partnerships.
- Managing business growth.
- Small business leadership.
Let’s take a closer look at each of these aspects of small business management in the context of the Manage It phase of the entrepreneur journey.
Small business finance tips
When thinking about the Manage It phase of the entrepreneur journey, first and foremost, make sure your business model makes sense, and focus on managing investment and profitability.
John Furrier, who founded multiple businesses including SiliconANGLE, has a very clear perspective:
“[You] can't go out of business with money in the bank, so focus on those billings and happy customers.”
Let’s dig into the first part of that thought: money in the bank. That’s not hypothetical money, that’s not potential money.
That’s cold, hard simoleons in your business checking account.
In professional services and freelancing businesses in particular, it’s common to send an invoice to a client for work that has been performed. But that’s not the same as actually having the money in hand.
Editor’s note: Microsoft Office 365 from GoDaddy can help keep you organized and get paid on time with features like Invoices and Outlook Customer Manager. Get paid on time and keep your client records organized, all in one place!
Get paid on time
To get the money in hand, you need to set up payment terms, plan for those terms, and most importantly, enforce them with your customers and partners.
Eric Weaver, who has been a part of multiple agencies and currently is a CEO of an early-stage startup, states in no uncertain terms that “the minute someone doesn't pay you on time, act. Once partners or clients start late-paying, it creates a trend and mindset that's hard to break. Be swift, be relentless, and be badass.”
That lag between when the invoice is sent and when the payment is received can sometimes be 60 to 90 days or more. This drag on cash flow can be painful to a small business.
To address this issue in her business, Cami MacNamara, a member of the GoDaddy Pro program, has an innovative approach to solve the problem of how to get clients to pay on time.
“The single biggest game-changer for me this year was putting all my new clients on a payment plan for new projects, based on 30-day increments, not based on milestones,” Cami says. “I wish I would have done this years ago.”
“[Clients] have to use PayPal to work with me on a new website design. I’ve been doing it since January 1st and I have signed six new clients with this method. IT HAS BEEN A GAME CHANGER for getting paid, keeping projects on time and most importantly, controlling my cash flow.
When I’ve sent a proposal to a client, they must schedule an in-person or over the phone proposal and contract review with me. We go over the proposal, contract and estimate together. We determine how much time a project may take and pick a payment plan.
- 3 payments: One-third down (non-refundable), one-third at 30 days, one-third at 60 days.
- 4 payments: One-fourth down (non-refundable), one-fourth at 30 days, one-fourth at 60 days, one-fourth at 90 days.
- 5 payments: One-fifth down (non-refundable), one-fifth at 30 days, one-fifth at 60 days, one-fifth at 90 days, one-fifth at 120 days.
- 6 payments: One-sixth down (non-refundable), one-sixth at 30 days, one-sixth at 60 days, one-sixth at 90 days, one-sixth at 120 days, one-sixth at 150 days.
The larger the project, the higher the price and the more time is the theory, but I did let a small business with a small invoice take the six-month plan because it was better for her cash flow. My [upfront] deposits are all smaller, but I really never want anyone to forfeit that. That wouldn’t be a good story for them to tell. They can’t sign my contract until we’ve reviewed and decided everything together.”
You can check out Cami’s full plan on how to make sure you always get paid as a freelancer.
Now of course, it’s much easier to ask customers and clients to pay on time if they feel the service you’re providing is in line with (or exceeds!) their expectations.
Additionally, it’s almost always more profitable to keep a customer than to lose one and then have to acquire a net-new customer in order to replace them.
To keep predictable revenue coming in during the Manage It stage, it’s important to think about customer retention.
Customer retention tips
“I retain clients by offering to handle everything else related to their site: domain name management, WordPress updates, and more complicated alterations on their sites." ~ John Russell, owner of digital agency JS Web Solutions
There are a number of factors that influence whether a customer will defect or not.
If you’ve made it to the Manage It stage of your journey, you probably have the basics dialed in and you’re likely providing your service in a predictable manner. You are probably offering helpful support when your customers need it.
Yet, even in those circumstances, customers still sometimes leave. Why is that?
Maybe those customers who left weren’t the right customers for your venture in the first place.
Find the right customers
Lisa Stambaugh is a web pro who has delivered more than 675 websites to clients over her career. Part of that success comes from working with clients who understand and align with her business approach.
“[In a] service or consulting business where landing new clients is a one-by-one process, find (and only accept) clients who are the right fit for you. Describe your ideal client, establish your evaluation criteria, have an evaluation strategy,” Lisa recommends.
“I expect most new businesses go in with the assumption that they will take whatever work comes along, but after the business is established, they can start to be more selective in taking clients that will be the most productive, lucrative, and who are easy, fun and enjoyable to work with.”
Have a plan to retain current clients
Lisa’s point of view of only bringing on the right clients is echoed by John Hawkins, who knows that retaining those clients for the long term is critical for success.
John is a fixture in the WordPress community, and has been developing websites for clients for over 20 years. In 2014, he penned a series of blog posts highlighting a number of the things he wished someone would have told him when he was starting out, called “Y U No Tell Me?”
One of the posts in the Y U No Tell Me series goes to the heart of developing long-term business relationships with clients.
“When I look back to when we first started, I think we treated many of the early client projects as if we were in a race. We were just trying to churn and burn to get on to the next client. The missed opportunities of keeping some of those early clients around kills me,” John writes.
“[Now], we have a pretty solid list of long-term clients. The majority of the long-term clients we have didn't come to us looking for a long-term relationship. They typically start off with the need for a one-off project and after it was completed they asked us to do something else. Then something else. So before you rush to move on to the next client, see if there's something you can do to keep the current ones around.”
Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one, according to the Harvard Business Review.
Ventures in the Manage It stage of the journey need to track customer retention as a key metric on their monthly dashboard to manage this aspect of their business.
Small business networking and partnership tips
“By referring your clients to known and trusted professionals providing complementary services, everyone wins.” ~ Lisa Stambaugh, owner of Collective Discovery
During the Grow It phase of the entrepreneur journey, you might have relied on individual superhuman acts (read: sheer hustle, individual tenacity and lack of sleep) to get things off the ground and grow the venture.
You did what you had to do in order to get the momentum going.
However, in the Manage It phase, it might be time to consider ramping down the individual acts of heroism and replace them with intelligently growing your small business network and partnerships.
Many hands make light work, and a network is far more resilient than any single node in it.
The importance of partnerships is a consistent theme from experienced entrepreneurs.
Find your “power partners”
Lisa Stambaugh says, “I call my inner circle of trusted pros my ‘Power Partners’ — they’re the ones who provide services that work in sync with mine, but don’t cannibalize work from me. Even though I don’t deliver what they do, I often have to work with them to make my clients successful.”
Building your small business network and nurturing partnerships takes some level of time and investment.
That investment can yield multiple benefits, including greater efficiency and maybe even a reduction in stress, as responsibilities can be shared with others.
Veteran entrepreneur Deborah Sweeney, CEO of MyCorporation.com, says her best advice for managing the backend process of a small, growing business is to outsource tasks.
“Do not try to do anything you are unfamiliar with or feel uncertain you may be able to grasp the concepts,” Deborah says. “You may hire a full-time employee, like a developer, who specializes in this line of work and has an established portfolio and track record in this field. Or, you may outsource the work to a freelancer or contractor through a website like TaskRabbit, if you feel that some of these tasks may not be enough to warrant hiring a full-time employee for the business.”
Eric Weaver highlights the importance of thoughtful partner selection.
“Choose partners carefully, particularly if they're a startup as well,” he cautions. “So many don't make it, and if you outsource a critical task to a partner, and they're struggling or fading, it'll hinder your success, too.”
The importance of partnership is echoed in this post from John Hawkins, where he reminds us that you can’t do it all yourself:
“You started your business because you love doing something. For me, that is building websites. Doesn't it make sense that you should try and spend as much time each day doing that thing that you enjoy and is probably what you are best at? You may not need a full time project manager, but maybe there's somebody who could help you out a few hours a week to keep things in order for you. Hire (or partner with) somebody who likes to do those things you don't like to do. (YES, there really are people who enjoy accounting.) Maybe you can find somebody to review your new business contact forms for you and weed out the ones that don't fit your skill set. Hire somebody to help with social media and marketing.”
Working with trusted partners to predictably handle the non-core aspects of your venture is critical to the Manage It phase.
While you could do everything, take a hard look at what you are doing at each step of your marketing, service, customer support and back office management processes.
As you go through your day and your week, ask yourself the following question on nearly every task, “Does it have to be me doing this? Is this the most valuable thing I can be working on right now?”
If the answer is “no,” start to think about finding a partner who can handle the more repeatable or non-core tasks, or outsource them to a cost-effective assistant.
Tips on managing business growth
Entrepreneur John Mecke has run a mergers and acquisitions consultancy as well as a local retail store. In both cases, product and marketing growth balanced the known and the innovative.
“In year 2+ of any new business, a primary challenge is to scale up what worked in year one and mitigate the things that did not go well,” John advises.
“[For our retail business], the key growth strategy was to become competent at hyperlocal internet marketing. The store was small — about 2,000 square feet located in a grocery-anchored shopping center. There were about 5,000 people in the area two miles around the store, and three country clubs. We updated our website to include a detailed inventory of our bourbon selection, which was a niche we focused on. We optimized it for local and mobile search. We learned that about 20% of our customers were visitors to the area, so performing well on Google Maps search and Yelp! were important.”
It was also important to know what not to do.
“We stopped doing snail mail advertising and instead spent our money on some Facebook and Google ads,” John says. “These things combined probably drove 25% of our traffic and 40% of our profit. The out-of-town visitors paid a premium for convenience and we took advantage of that.”
Smart stuff, and that focus on execution has helped Mecke grow his businesses in two radically different industries.
Speaking of execution, the Manage It phase of your journey is the time to fine-tune your project management processes if you haven’t already done so.
This is vital for managing business growth.
Laurel Delaney, founder and president of Women Entrepreneurs Grow Global®, a nonprofit organization which educates women entrepreneurs and business owners, uses Trello for project management.
“We host monthly educational wegginars®, weggchats® and workshops at wegg® and the only way to manage those projects is to have all information in one place for our team members to access easily,” Laurel says.
“Full focus is vital to our success and to the women entrepreneurs and business owners we serve. We love the fact that we can keep track of everything — from big picture to the minutiae — on one platform, have fun, put on great programs, and help people grow global.”
Consider the why
When thinking about business growth, however, also think very clearly about why you want the business to grow. Is it to serve customers better? Satisfy investors? Or is it to feed an internal need?
There’s no right or wrong answer, but knowing the why is important.
Consultant and author Paul Jarvis, author of the book Company of One, focused on goals, rather than growth for growth’s sake.
Bigger is not always better. Manage to your goals, and work your plan.
Tips for small business leadership in the Manage It stage
“If you are open to and embrace change, even with an established business, your team will be ready and willing to follow making everyone as productive as possible.” ~ Nellie Akalp, founder and CEO of CorpNet.com
Nellie Akalp, founder and CEO of CorpNet.com, takes a pragmatic approach to leading an organization in the Manage It phase of the Journey.
“Once a business is established and bringing in cash, you may think you have it all figured out,” she says. “Most of the time, though, unfortunately, that’s not the case and that mindset really hampers productivity for you and your team. There is no auto-pilot for most businesses.”
“It’s important that founders stay open-minded for changing courses of a business that most-often naturally happen. You plan for one thing, but a new course takes shape that is worth pursuing and could be more beneficial.
If you are open to and embrace change, even with an established business, your team will be ready and willing to follow making everyone as productive as possible.
After managing my sales team daily for the last 10-plus years, I’ve found that no tool, resource, or retreat could connect us like mutual respect does. If you don’t respect your team, they won’t respect you and the enterprise you’ve spent so much time building will crumble.
Business owners and leaders should be in the trenches with the team. Be the first one in and the last one out showing your team that you care about their business and that will make them do the same.
Not everyone will get along — but everyone can find a way to mutually respect one another. Respect in the office is a fundamental ingredient to any long-term successful business and it starts with those daily operations from your sales and marketing teams.”
Small business management is a journey
The grit needed to get to this point is absolutely still part of the recipe for success. But the Manage It stage is as much about reflection and thoughtful application of the skills that have been gained over the previous stages as it is about the sheer force of will it took to arrive here.
The particular thing that resonates most strongly for me are the twin themes of partnership and respect.
Connecting up with others who are also on the Journey, and doing so from a place of mutual trust and respect, not only helps to make the venture more successful, it makes the path more human. And even in a highly digital world, human connections matter.