Capturing the Best of the New American Dream in Small Business

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The American Dream Today

Many people take the American Dream for granted. For those outside of the states, America is still the land of opportunity, and small business is the beacon for achieving it.

You just don’t hear stories of opportunities from small business owners. You hear stories of highs and lows, stories of frustration and missed opportunities. They share stories of hardship, of sacrifice and struggle. Is that really all small business is cracked up to be?

Is the American Dream dead?

The American Dream is not dead, and your small business journey can be profitable, beneficial and enjoyable. The nature of success in small business, however, is redefining itself. This redefinition is transforming so many aspects of the small business landscape, including our definition of the American Dream.

There are symptoms of the necessity of this change, such as the feelings of hardship and the struggle in your small businesses. These are the indicators that the old ways of business growth and management aren’t working.

The good news is that the American Dream, just like small business landscape is transforming into something better.

A New American Dream is Emerging

To realize the New American Dream, you must show up differently, do things differently and have different expectations of yourself, your businesses and your team.

This New American Dream is dizzying, exciting and uncertain because it is brimming with potential, opportunity and so many ways to make it happen.

The New American Dream is playing out in startups, incubators and in the software and technology spaces. Tremendous innovation and scalability are happening in almost every industry. If we have these successes to model, why are many entrepreneurs struggling to achieve scalability?

The answer is that most small business owners, especially those who own service-based businesses; haven’t shifted their beliefs, habits, and vision from the Old American Dream.

Over 80% of the Small Business Economy are Service-Based Businesses

It is easy to get caught up in focusing on how hard things are in business, how good the ‘good-old-days’ were, and how bad today is. Owners who get stuck here are talking about recessions and closing shop rather than innovation, profitability, and scalability.

But if you are called to the possibility of the New American Dream, where do you start? Your first step is to define what the New American Dream will look like in your business.

What does the New American Dream look like?

A desire for freedom is the most cited reason entrepreneurs give for starting their small business. One of the benefits of the New American dream is a personalized realization of freedom. While everyone’s definition of freedom looks different, the beauty of today’s landscape is that you can define what freedom looks like for you and achieve it quickly.

A desire for freedom is the most cited reason entrepreneurs give for starting their small business.

Freedom in the Old American Dream was a result of the work that you put into business. Freedom was the reward for crossing the finish line. The sneaky little thing about entrepreneurship is that the finish line is a mirage. Small business ownership is not about winning a race, it’s about evolving on the journey.

Freedom in the New American Dream is an intention and an expectation. It must be designed into the business from the beginning, or during the redesign phases to become a reality. The goal is to realize freedom quickly in your business and set the strategic vision of the business to support it.

The New American Dream is about Adaptability and Flexibility

One of my clients texted me last week – “My brother just asked me what am I going to do with my business if there’s a recession? How do I answer that?”

We get these kinds of questions from our family, especially if you happen to be a woman business owner, and if your business happens to be scaling at a lightning speed.

Which is exactly where this client is, in the first 6 months of 2019, the revenue in her business equaled what it took 12 months to earn in 2018, putting her on track for a strong 7-figure business this year. This is from the same business that previously has only experienced 10% growth year over year. The difference is this year, she has adopted scaling strategies in her business to realize her New American Dream.

“Tell him you’ll be just fine because of the way you have scaled your business. You can scale up or down regardless of the market shifts,” I replied. “And the financial stability that we have and continue to grow in the business means that you can handle shifts in your sales cycle, your client’s payment cycle – and take advantage some of the golden opportunities that show up in a recession.”

The only constant is change. When business owners build a business that is rigid, it can’t flex with the environment. This Old American Dream mantra assumed success needed permanence.

There are too many factors that affect a business. Ignore them all, then something is bound to sneak up on you. Worry about them all and you’ll fear your own shadow.

Setting a good foundation of business practices, strategies, and management is the difference between those that fail in this environment and those that thrive. Market corrections are part of the cycle, but it doesn’t mean your business has to tragically succumb to them.

The benefit is a solid foundation can adapt to the times and allows for pivots and shifts. To be able to adapt with the ebb and flow of the landscape, an attitude of learning and incorporation of learning must be a part of your business management style.

The New American Dream is Improved Cash Flow and Increased Financial Stability

Making these simple adjustments in her business, my client has found is that she can pay herself, reward her staff, make an impact through charitable donations while building financial stability in her business. These tweaks in her business and how the cash is managed on a day-to-day basis started generating results almost instantly.

Before implementing these strategies, she felt like her business was on the roller coaster of feast or famine and she was constantly worried about there being enough leftover month to month. Every expenditure, no matter how necessary, made her nervous. There were investments she wanted to make, but she didn’t feel safe in making them. She felt stuck between a rock and a hard place.

The old definition of growth dictates you must sacrifice first to make growth possible. Since most investments require money, business owners run into two problems:

1. Revenue generated by growth is generally equal to the amount invested (a 1:1 ratio of return)
2. The growth that is generated typically takes 6-18 months to fully realize a return (i.e. cash in the bank)

Growth effectively sucks cash out of the business. This can be masked in your business by the momentum in your business, but if your business slows, you’ll see the evidence of a problem quickly.

Growth sucks cash out of a business. The average business owner has 9 -12 days of working cash on hand.

Here’s why this is a problem. The average small business owner has 9-12 days of working cash on hand in their business. If you worry about making payroll every month, but always seem to make it work – this is probably happening in your business.

That means you are ‘living client payment to client payment’ and can’t afford to wait 6 – 18 months to see the cash return to your business.

The old way believes that the only way to fix limited cash flow is to grow first. From what I’ve seen in small business, if you have cash issues at X size, you will have bigger cash issues at 3X size.

In the New American Dream of small business, you fix the cash first in your business, then scale. Cash and profit are intentions and need to be the priority in a business to create financial stability.

When your business is stable, you feel more optimistic, and can make those financial investments with greater confidence – AND, you have the time to allow that investment to mature and realize the cash it creates while being also recession proofing your business.

The New American Dream is about Ease and Sustainability

The Old American Dream was about working hard and making it someday. It was about slow, steady linear growth that was ‘safe’. It was about making large growth investments and riding the wave for years. It was about taking things at a measured pace, like the tortoise in the tortoise and the hare story.

Slow and steady doesn’t cut it anymore.

The old way defines ‘good’ growth as 14.4% growth year over year. If you keep that pace, then in 5 years your business will double.

Times have changed a bit and it’s time to capitalize on those changes. While growth is good, that slow and steady pace is likely leaving money on the table.

What if you could take the best of both the tortoise and the hare and use it to your advantage?

Today’s landscape suits the scalability of service-based businesses so well. Through technology, apps, the Gig Economy, cloud-based resources, digital marketing - ideas and strategies can be implemented at a lightning speed and often with a few clicks of a keyboard. You can scale because you can invest in just what you need, when you need it and only if necessary.

The New American Dream is about Working Smarter, Not Harder

The Old American Dream is defined by hard work. The New American Dream is defined by smart work.

It is not about working harder, it is about working smarter.

Ambitious entrepreneurs have no problem with hard work. Hard work will get you far, it just can’t get you all the way there. Burnout is a big issue in entrepreneurship. If you could only see how many successful business owners are nearing burnout – you’d cry.

They are beat up and beat down. They are not functioning on all cylinders and they are seriously questioning whether it is all worth it. It’s not uncommon to hear one of these business owners talk about getting a job so that they can make more, work less and get paid benefits.

This is a sure sign of the Old American Dream and why the strategies we are discussing are so critical to get into place in your business.

For service-based businesses the greatest limitation, the largest line-item on the profit & loss statement and the greatest source of potential lies with the people doing the work and how the work gets done.

Embracing the New American Dream means that we need to embrace working smarter, not harder not just for yourself as a business owner, but for your team as well. Changing the emphasis from hours to results is how the service-based business finds economies of scale.

If you have fixed cash and profitability in the business, then look at the nature of the work done in the business. Often, the next step to ask this question before you turn on the scaling engines.

“If I were to double my business, double my clients, double my team or double the work, what would fall apart in my business?”

Write that list of what would fall apart, prioritize and set about mitigating the risks. Here is an example of how that might show up in your business

For another client’s business, we’ve set the intention to take the business from $3 million to $15 million in the next 3 years.

The answer to the question for this client all came down to how the work is managed, assigned and flows through the company. The operations and logistics are her biggest bottlenecks. The work that comes into the business has a habit of starting, then stopping, only to be picked back up again later. This is the nature of their work, and not in their power to control. If we double the business, then we amplify the feeling of chaos that comes with the rhythm of the work. The challenge is to marry how the work is done with the flow of the work to maximize productivity and flexibility.

The first part of her strategy is to ensure that the right people are on the bus, sitting in the right seats, and sharing that vision. It takes a special person to ebb and flow with the work.

Once in place, we turned our sights on transforming the management of the flow of work which includes transitioning from manual project management to a more automated technology that can supply data and reports, but also requires less time to manage.

To counteract the bottlenecks, we created an autonomous fluid team structure that rely on roles over positions. This gives the business the ability to simultaneously cross-train and develop team members while maximizing the subject matter experts within the business. Lastly, we have focused on standardizing and documenting processes so that work can be done well in the fluid environment.

The New American Dream is about Embracing Rapid and Exponential Scalability

This is going to be the area that brings up the most distrust, disbelief and mental blocks. How can fast be safe? How can fast be real and lasting?

Easy. Start by realizing that rapid and exponential scalability are a part of the landscape whether your belief has caught up to that or not. Technology, information, data, the ideation to creation process are all on hyper-drive.

“In the space of one decade, we are dealing with change that previously had taken a generation to adapt to... Harnessed properly, that exponential change will hold the answers to many of our big problems, including our belated action on climate change.” “The rate of technological change is now exceeding our ability to adapt”, By Peter Griffin Apr 23, 2017

Don’t fight this rate of change because it wasn’t the way we used to do it, or because it isn’t the way it is done in the industry. The truth is that there are plenty of business owners who have embraced the pace, and they are disrupting your industry even as you sit here reading this article.

The great thing is that you can find a technological answer to mitigating just about any business risk. You just can’t count on it being the ‘forever’ answer. The great thing about today is that you can reach more of your ideal client in more ways faster than ever before. You just can’t assume that they will be your ‘forever’ client, or that what works today will work tomorrow. There’s more opportunity, but less permanence.

This requires you as a business owner to adopt more of a flexibility iterative approach to business using the most on-demand resources as possible and be able to use feedback mechanisms (learning) back into the business quickly and effectively.

Key to embracing rapid and exponential change is let go of the waterfall, linear aspect of growth and embrace the compounding effect of scalability. If rapid feels unsafe, it is often because you cannot see what is happening in small ways that generate a big impact.

When you see exponential change because of scaling, what is happening on a small level is the result of making tiny gains in business consistently over time. These small gains are often so small that they feel easy. It is also easy to discredit these small gains because they feel insignificant, like they aren’t going to move the needle. That’s where you can stop yourself 6 inches from greatness.

Consider this, the power of tiny gains is that a 1% improvement repeated every day for one year, the gain would compound to a nearly 38% improvement at the end of the year. No imagine, what if you took that 1% improvement across 5 areas of impact in your business? Easy, you would see a 224% rate of growth at the end of the year. That’s more than tripling your business.

That is how you produce exponential growth, you stay focused long enough to allow the compound effect to create impact, if 1% is easy – then 224% becomes very doable.

What is possible in your New American Dream?

These are the principles that are working for small business owners across industries and revenue size. What is it going to take for you to see it in your business?

If you believe in yourself and your business and you are willing to do things a little differently, then you can be successful at making your New American Dream possible. Begin with one of the strategies in this article, allow yourself to see the possibilities and opportunities again. Seek out the resources and mentoring to help guide you on your journey of building your New American Dream.

About the Author

Leslie Hassler is a dynamic author, speaker, and business strategist guiding women owned, service-based businesses into more profits, cash flow, and success. Business owners come to Leslie seeking a way to strategically scale their businesses richly, stop the money leaks, and get back in control with confidence.

Using her more than 12 years of experience in business, finance, mindset, and more, Leslie takes multiple 6 and 7-figure businesses from cash-strapped and struggling to profitable and thriving with her unique Scaling Rich? Method.

Her genius has also been featured on stages around the United States such as the National Association of Women Business Owners (NAWBO), the Women’s Business Enterprise National Council (WBENC), and more. 

Join Leslie, Comerica Bank and Venturity Partners for the Scaling Rich Event on January 23, 2020, click here for more details.