I have run multiple digital and service-based businesses over the last decade. Over that time, I've learned a thing or two. I've had a number of people ask me about what they should do or what I'd recommend to someone who is looking to start their own business, so I figured it might be worth writing them down instead of keeping them in my head!
Over the last few years, I have recapped the lessons learned in my first year of running Brainchild Studios, and the second year, and the third year, and I created the Work From Home Playbook, a compilation of 44 very detailed next steps to start your own business. But if you're looking for the cheat sheet, here are my basic business recommendations and lessons learned based on my experience over the last decade or so.
18 Tips on Starting a Small Business
- Know why you are starting your business. Don't start a business because you think you'll get rich. Most entrepreneurs and small business owners never see that big payday. Start it because it allows you to have opportunities that aren't currently available. Love the business you're creating and make sure it allows you to live the life you want so you're not a slave to your business for eternity.
- Make sure your business works for you. Running a business is hard. Entrepreneurship isn't for everyone. The highs are very high and the lows are very low. Make sure you're setting up a business that will help you meet your life goals because that's ultimately what should be most important - the quality of your life.
- Be careful with whom you go into business. Everything is good until it's not and when it's not (and there will be times when it's not), just make sure you're not facing a potential fall out with a sibling, parent, favorite aunt, significant other, or life-long best friend. Business, money, and power can bring out the ugly in people.
- Set your brand fundamentals. This may not make sense right away or maybe it will. But take the time to think through and clearly state your brand goals, values, vision, and mission. The sooner you're able to do this deep thinking work, the easier it will be to make decisions for your business in the long run.
- Invest in legal counsel. I know attorneys are expensive, I oftentimes think I went into the wrong career. But when crap hits the fan (and I promise you it will), you will be so glad you were proactive and got the details of your agreement with whoever in writing, in a real legal contract created on your behalf from a real human attorney. The amount of money you could wind up paying in litigation fees or even trying to avoid litigation all together will make this proactive investment look like pennies. I promise. Shout out to Melnick & Melnick for always having our back.
- Invest in legal documentation. See above - don't fight me on this. I recommend (at a minimum) the following legal documents for any service-based business, but again, I am no attorney:
- Non-Disclosure Agreement (NDA)
- Master Services Agreement (MSA)
- Independent Contractor Agreement (ICA)
- Employment Agreement
- Operating Agreement (if you're not 100% owner of your business)
- Hope people are good, but assume they are the devil. Again, see above. Everything is well and good until it's not and then it's a disaster. Just promise to do #5 and #6, ok? Ok.
- Outsource your numbers. Unless you're an accountant or bookkeeper. But if you aren't, please don't try to be the master keeper of your numbers, you will mess it up. Even if you try your very best, you'll mess it up. And if you can't run your business by the numbers, it will eat itself from the inside out. Hire a bookkeeper and accountant to keep track of your numbers from the beginning. Shout out to Iryna Stepanchuk for always guiding us in the right direction. Also shout out to Victoria Haas, who is also amazing!
- Delegate. Delegate as soon as you can. The more responsibilities you take on as a solopreneur, the more the business weighs you down, and the less time you have to invest in the business and grow the business. Delegate to an assistant or contractors as soon as you can afford to do so.
- Aim for thirds. 33% of your time spend in your business. 33% of your time spend on your business. 33% of your time growing your business. At least until you hit about your third year when you can bring on more help so you can focus the majority of your time on improving and growing your business, and less time in your business.
- Offer profitable products and services. This might sound silly, but so many entrepreneurs fail miserably here. Know your expenses and Adjusted Gross Income (AGI) to make sure you're selling products and services that are meeting the AGI goals you have set for yourself so your business can not only stay afloat but prosper.
- Practice what you preach. The saying "the cobbler's son has no shoes" is true to many businesses as well. I know too many marketing agencies that suck at marketing themselves. When you don't practice what you preach, you not only do yourself a disservice in that specific area, but you also ding your credibility in your industry as well, which could have a negative impact on business development.
- Hire slow and fire fast is real. However, neither is particularly fun. Often times when you need help, you'll need it right away. Do yourself a favor and continually have conversations and build relationships with people you think you might, or could potentially, partner with if the need were to ever arise. This way you'll hopefully find yourself making better and smarter hiring decisions when the time comes. Because a bad hire can really hurt your company and often comes with a lot of baggage to reverse that decision.
- Create a termination process. When it comes to letting an employee go, there are a number of legal elements you need to be aware of, so I'd recommend creating a process that includes legal counsel advice prior to running into this difficult situation. And know that hiring an employee comes with many more terms, conditions, and legalities than a contractor. Also, know that it sucks to let someone go. It never gets easier. It always sucks. It's just less scary with a process in place.
- Know the difference between a contractor and an employee. In some cases, you may find yourself flirting with this very this line regarding the differentiation of these two. Be wary of this as it can sometimes be a very blurry line that can get small businesses in trouble. But running a business with contractors can be an extremely viable, and sometimes the best, option for you. Don't knock it until you try it - but just know what lines not to cross.
- Seek out devil's advocates. As an entrepreneur, you will likely have a ton of ideas. Chances are that most of them will suck. Find mentors, advisors, and people you can trust who will be honest with you. They will save you so much time, heartache, energy, and money in the long run. They will not always say what you want to hear, but that's why they're so great. Shout out to Lori Richards from Mueller Communications for saving me from walking, no more like running, off so many entrepreneurial cliffs. Thank you.
- Find a trusted posse. Entrepreneurship is lonely. No one really understands it unless they are an entrepreneur themselves. Find people who know where you're coming from, can commiserate, advise, and listen with true empathy. These people will help you build bridges to venture to from the entrepreneurial island you might feel like you're on at times. Plus, it will make this journey much more fun.
- Keep your equity. Now people will fight me on this and that's ok. I'm still a firm believer that unless you're trying to scale big fast (which can be super dangerous) holding the equity of your business close to your heart is the way to go. When you give up equity in your company, you open up your entire business to scrutiny, elongated decision-making processes, tax implications, more complicated finances, etc. There are two sides to every story, but at least to start out with, keep your baby yours until you have a good reason to share it with others.
Check out my other lessons and recommendations about branding/marketing, business development, finances, and operations and systems of starting a small business too! And if you'd like a full step-by-step guide on how to start your online/virtual business, I documented all of those steps in great detail in my Work From Home Playbook, so check that out too!
At the end of the day, build a business that allows you to do work you believe in, gives you purpose, and gets you fired up. If you're true to yourself and adopt this approach, you'll always be motivated to do the work. And you have to be motivated to invest the blood, sweat, and tears into your business to make it work because if you're not, there are few changes it'll actually survive.
You have to keep the fire burning, baby.
Kiley Executive Coach & Consultant
Kiley Peters is a serial entrepreneur, national speaker, executive coach, and small business consultant. Having personally counseled over 100 small and medium-sized businesses on operations, business development, digital marketing, and consumer behavior analysis over the last 17 years Kiley is incredibly passionate about serving small business owners. She is the Founder and CEO of Brainchild Studios, a research and business strategy partner for small businesses and mid-market executives, and also created the Work From Home Playbook, a series of online courses guiding aspiring entrepreneurs through the steps of starting a virtual business. With these experiences in her back pocket, she understands the challenges and struggles small business owners encounter.more posts by Kiley →
Entrepreneurship, Leadership, Resources
Life, Entrepreneurship, Leadership