When small business leaders think about growing their operations, they often ask themselves this question: What separates the men from the boys? In other words, they consider what more established businesses in their industry have that they want. This doesn’t just refer to common sense answers like more employees or more clients. It’s safe to say that there are certain behaviors and viewpoints that are sensible for young businesses but potentially hazardous for another business that wants to achieve sustainable growth. The same concept applies to professional athletes or entertainers. At some point, they realize they aren’t young anymore and must make some serious changes in order to continue doing what they love.
Two prevalent themes of these changes are rationality and longevity. Here are three commonly overlooked differences between young and established small businesses:
1. You Can’t Hustle Forever
Many thriving small businesses owe their success to the tremendous efforts put in by their first employees. If they were going to survive let alone become profitable, employees had to work day in and day out. There was almost no time off, and every achievement only made them work harder. But one key difference between young and established small businesses is that the latter works smart, not hard. As rewarding as this rigorous work ethic may be, it cannot be maintained forever. Sooner or later, you’re going to discover that trying to increase profits or clientele as much as possible is not always the best strategy for a business that has efficiency and its future in mind.
Let’s say you and your team are currently making a lot of money but primarily because you are serving an excessive amount of clients. Yes, you have to work your tail off to become successful. But something is eventually going to prevent you from keeping up that pace. So instead of relying on a seemingly unparalleled work ethic, you might want to think about a new, more sensible strategy. You could charge clients more money or create additional streams of income. Such strategies have less threats to their sustainability and can lead to more opportunities for growth.
2. Ask And You Shall Receive
When people start their careers, they earn opportunities by taking advantage of their connections. Once your business has amassed a substantial track record, these connections become your most loyal customers and business partners. If you know how to take advantage of them just like your initial connections, you can dramatically increase your revenue or profits with minimal effort on your part. There’s a popular misconception that the only way to do this is to ask for discounts. This is vital but you can also ask for referrals, or simply say that you’re looking for more work.
It’s natural for younger business leaders to be hesitant about being so up front with their customers or clients. Established businesses, on the other hand, are well-aware that good money is not the only reward that comes with maintaining a trustworthy reputation and doing quality work. And if your customers or clients are experienced, they will interpret your tenacity as a sign that you are serious about growing your business.
3. Have A Financial Plan
No one understands the aforementioned “work smart, not hard” theory better than business financing institutions. Why do banks only seem to approve small business loans for applicants who don’t actually need the money? It’s because these applicants determined that it was smarter for them to finance their desired investment with borrowed funds rather than digging into their reserves or frantically trying to increase their own revenue. Working capital loans, business lines of credit, SBA Loans and other business funding programs help companies hire more workers than they can currently afford or cover regular business expenses after changing clients.
A big reason why companies like United Capital Source have made small business loans more accessible is the importance of having a financial plan. Growing businesses must know how they will finance their operations in the immediate and not-so-distant future. When you can’t think of a plan that doesn’t involve working unnecessarily hard for an uncertain future, it’s time to consider a small business loan. Getting this element under control will make other uncertainties of your business fall into place.
Work With Us To See What We Mean
The second item on this list stresses the value of loyal business partners. At United Capital Source, we offer the most rewards for the clients who ask the most questions and give us the most information. Without the right program for your circumstances, rates and amounts won’t allow you to reach your goals. You have to know what your business needs to cut out everything it doesn’t.