Ten things I learned building a small business
2021 is on the horizon and I’ll be celebrating its arrival with the sale of my business.
Two weeks ago, I announced to my customers that I was selling the dance school I’ve owned for the past six years. The school has already shut down for the year, so for all intents and purposes, I have no more responsibilities. But settlement isn’t until the last day of December, so I’m counting down the days to when I officially become a former small businesswoman.
During six years in business, I’ve learnt a lot. Would I do it again? I’m not so sure. But I now have an appreciation of small business ownership that I think you really have to have lived to understand.
I bought the school when I was twenty two. My first passion was ballet, but I realised in my late teens that a career in it wasn’t an option for me with my injury-prone body. I taught classes part time while I was at university instead, earning a good wage. It was the perfect job for me while I studied my second passion, politics.
It’s a long story as to how I came to buy a dance school, but it is fair to say it was not part of the life plan when it happened.
The first year was awful.
I was young, for starters. I came in knowing how to teach but actually running a business? I had no clue.
I also ‘inherited’ some difficult staff who made it clear that they saw me as a naïve, little girl. Attempts to make my mark were not taken seriously. In fact, they were laughed at and outright rejected.
I realised this almost immediately but it took almost a year of stress before the situation was resolved. Things were exacerbated by a couple of bad hires on my part. One experience was so bad that I almost walked away from the business completely.
Then there were the overdue payments and bad debts. I was too nice, to be honest, which made it easy for customers to take advantage of me. Cashflow is a never-ending source of stress for small businesses.
A number of other things occurred that I’d rather not get into.
Towards the end of the first year, I knew that things were not sustainable. I completely rebranded – including changing the name of the school – which meant that I could start from scratch. It was a big gamble.
But five years later, I could not be more proud of the business I am passing on.
Here’s what I’ve learnt.
1. Reward competence with autonomy
Only with a strong team will you build a strong brand. And when you know you’ve hired the best person, get out of their way. Autonomy is a strong motivator; if you want the best performance from your team, they have to know you trust them. When they know that, you’ll watch them flourish.
2. Build a culture and protect it
Culture is everything. I am a broken record when it comes to values, but if they aren’t a part of who you are – and instilled in your daily life – then your business will never be a place others want to be. Culture starts from the top, and works its way down through your team to your customers.
It’s okay to demand those values from your customers too, especially if their behaviour impacts others (like it does at a dance school when you’ve got crazy dance mums). It was no great loss to me if I lost a student who was detrimental to the culture I had created, even if it meant a drop in sales. It’s highly likely that many others would have just left instead.
3. Realise you can’t please everyone
You need to be the boss and learn to say no. For some – like me – it’s hard offending people or telling them something they might not like to hear. As a new business owner, your instinct might be to bend over backwards for customers. But at the end of the day, it’s your business and your reputation on the line. Don’t risk that for anyone.
4. Have a system to guarantee good communication
Communication with your customers is crucial. If you’re an anxious person like me who has a hard time with emails and phone calls, delegate this job to someone else.
5. Stay on top of debtors
Don’t be afraid to use debt collectors. If you’re owed money, and having a hard time retrieving it, an email from Baycorp usually does the trick. If you’re afraid of losing them as a customer, ask yourself if you really want people who devalue you and your services as customers anyway.
6. Cash is king
Have enough cash for a rainy day – especially when you’re first starting up. Always assume there’s another Covid-19 lockdown around the corner!
7. Compartmentalise
Understand that you will never just work 40 hours a week. Your business is your life. But if you can, separate your home life from your work space. Don’t answer emails at home if you don’t have to, and don’t give out your personal mobile number unless it’s an emergency.
Wherever possible, create a separation; it will benefit your mental health.
8. Surround yourself with supporters
Build a support network, because you can’t do everything on your own. For me, this wasn’t just my wonderful staff, but a small number of incredibly loyal parents who created a sort of cocoon around me during challenging times. And if you’re lucky enough to have these people surrounding you, make sure you look after them too. It’s a two-way street.
9. Remember to be grateful
Appreciate your staff and loyal customers. They are your business.
10. Know when it’s time to move on
Some people may be satisfied owning the same business for the whole of their working lives. For others, an opportunity to hand it on just may be too good to refuse. Knowing when the time is right requires a both reflection and maturity.
So, what now for me? I’m just going to enjoy summer without the stress of reopening, and having a nine-to-five job for the first time in my life.
Monique Poirier has a Masters degree in Political Studies, and is a small business owner and former Parliamentary staffer. She is the Campaigns Manager for the Auckland Ratepayers’ Alliance.