Lessons From A Small Business

Between October 2008 and December 2008, we were having a busy 4th quarter leading up to the end-of-year industry shutdown.

I was working in our family-owned and managed cabinetmaking company.?

This business had been part of our lives for over 20 years. Quite an accomplishment when you consider that 50% of businesses fail in the first 5 years and 70% fail within 10 years.

But we noticed that something was a bit off. We were busy but not as busy as we would usually be, and our forward pipeline of orders wasn’t coming through the way it usually would have.

However, we kept our heads down and shoulders to the grindstone. Gotta keep moving forward. Got bills to pay.

When we opened up the factory in January 2009, the market was dead quiet.?

Contracts were canceled or delayed until further notice, and orders from our regular customers were a trickle of what they once were.

It was as if a tap had been closed.

The great financial crisis had struck but we didn’t know this at the time.

It was all hands on deck for us as a family, and the fear and panic was very tangible.

By the end of March 2009, we were closing the doors on our business.

Here are 3 lessons I learned:

1. Have your affairs in order

Get your financial and legal structures in place. As well as an exit strategy. When your ship is about to get washed onto the rocks that is not the time to start wondering if the lifeboats are in working order and you’re looking for the emergency exits.

When you’re panicking, you can’t think clearly and your systems and strategies need to kick in and guide you.

2. Scramble.?

Take action. Don’t sit there thinking things will get magically get better. Most small businesses have 30 to 60 days of cash flow ahead of them. In other words, they are 30 to 60 days away from catastrophe.

This means that if your business is struggling and business conditions have not improved significantly within 60 days you need to know what your next 5 moves will be.

3. Network?

To give yourself the best possible chance of a thriving small business you need to NETWORK.

I use the word network very broadly to mean, building a network of customers across a broader range of products and services and then within each category seeking to go deeper with more customers.

Get involved in industry associations and chambers of commerce.

Don’t be shy, reach out to fellow competitors and see how you can be of service to them, you’ll surprise yourself at the alliances and joint ventures you could develop.

Channel as much effort and energy as you can into building your customer base. Customers or clients are the ones who provide you with cash flow. And an abundance of cashflow always buys you time and forgives a lot of other weaknesses in your business.

As small business owners, we tend to silo ourselves and keep ourselves isolated within our own businesses, busy, tired, and with fragmented thinking. There’s always just too much to do.

I could go on but I’ll leave it there for now.

I hope these thoughts can add some value to someone’s day.

Wishing you everything of the best.

P.S. I highly recommend this book. I could have benefitted from it enormously all those years ago.?

Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

It’s not an affiliate link. Just some good information.