For nearly 25 years, I’ve owned a business in the construction industry. I’ve eagerly devoured many “lessons learned” business posts, hoping to glean some secrets for having a perfectly balanced business and personal life, a business without friction points, and glory days where cash flows unassisted into your bank.
However, the reality is often quite different for small-business owners, and I want to share some lessons I’ve learned the hard way.
You don’t have to scale (or, up yours, capitalism)
I’ve been a company of one and I’ve had up to 18 employees. Today, I have 14 employees, and I’m not planning to increase that number. The memory of having to lay off staff in 2018 due to a health crisis and financial oversight still haunts me. Rushing growth without a solid leadership structure proved costly, and the burden of impacting employees’ livelihoods lingers. Now, I prioritise cautious growth, considering financial implications and the energy required to support a team.
Chasing revenue for the sake of it is also highly overrated.
Screw the vanity metrics of “I made seven figures!”. I want to know profit, mate
Many boast about their seven-, eight- or one-hundred-figure business, but true success lies in profitability, not just income. Profit is what remains after covering all expenses, including taxes, wages, and overheads and you must pull a healthy profit to take on the risk of owning a business.
I also emphasise this point: having a business is risky. Your success, return on investment, and client payment is not guaranteed. Profit is the sign of a healthy business, and in these (still ongoing) uncertain times, you want to deal with a financially stable company that represents a safe pair of hands.
Pay your suppliers within 30 days
Post-GFC times, it came as a massive shock to me that I not only owed a small business, I also owed a bank. A major supplier’s abrupt shift from 30-day to 60-day payment terms left me reeling. No negotiation, no personal contact, no fruit basket – just a cold-form letter. Good times.
Good businesses, both large and small, are going to the wall because their cashflow is rubbish. They can’t get a real human from the accounts department on the line to sort it out as it’s all offshored, and no one is picking up the phone. The construction industry (and others) is rife with this practice of stringing out suppliers, and it needs to stop.
Gather a support crew around you that is fit for purpose
Too late in my business journey, I realised I lacked crucial skills like understanding balance sheets, navigating tough conversations, and crafting meaningful employment contracts. It was embarrassing not to excel at these tasks, as they didn’t come naturally to me.
My talents are limited to design direction, project management, and problem-solving. Anything else, and I’m like a fish out of water. That’s where having a support team is crucial. As a business owner, you wear many hats, but get smart and hire specialists in areas outside your genius zone.
Be a good human
Business is personal. You’re dealing with people, and you have to see the human behind the quote, the project, the design and the contract. Recently, I’ve been giving people the benefit of the doubt. They haven’t called because they’re busy, too. They haven’t signed off on the quote because they must speak to their manager. A little bit of grace goes a long way.
Wherever you are on your business trip, I hope you remember you’re your own best source of wisdom. Trust in your kindness and grit to make good decisions while caring for yourself through the whitewater of business.
