This post is about the different things that a small business can do to scale in volume and revenue. Everything may not be relevant to every small business. The intention of this post is to give you ideas so you can get those grey cells working when you are feeling stuck.
Having run a handmade small business myself, I know you can get too caught up in operations, sales and delivery, that you start noticing a pattern where you are making enough to sustain, but not enough to grow. And growth is needed for two reasons: One, stagnation is not a good idea, human beings want to see progress. Two, business is not always constant, there are highs and lows. While highs are great, we need to be prepared for the lows at all time and some surplus helps ease pressure.
Funding: We all know money makes more money. The more stock you invest in, the more aggressive you can market it, sell more and earn more. Simple and straight forward. But it somehow always gets stuck in the first step: investing in more stock. How do you raise money? Personally, I am not a fan of borrowing money from banks, private firms or people. (Also, in my experience I haven’t come across any government schemes which help small businesses where you dont have to deal with nasty government employees and/or pay bribes to avail benefits. If you know of any, please leave a comment below) I find that debt becomes a bigger burden when you are on your own and it can bog you down and kill your creativity.
Unless you are building something that you plan to scale rapidly and sell off, accepting funding is not a great way forward. You also lose a lot of the control you have on your products and processes, the minute there is a need to maximize profit for the investor. So if you are someone who wants to grow organically, here are some ways you can do it.
- Cultivate the planning and taking action mindset: Unfortunately, this is number one on my list. A lot of the people who I have met run their business as a hobby and wonder why its not giving returns. Its the law of the universe: you dont take it seriously, it doesn’t take you seriously. Wishful thinking doesn’t get you anywhere, planning and taking action does. Dont be afraid to try new things and fail. Plan – execute – repeat.
- Know your Purpose: If the objective of your business is only to make money, know that its not sustainable in the long run. You will lose interest in no time. Money cannot be a sole motivator. Look at the bigger picture. Are you providing employment opportunity for someone? Are you able to provide a better lifestyle to your children through work? What can you do to better the life of someone who works with you? When you have a greater purpose, it will keep the fire burning and push you to do better.
- Know your finances: Its important to know the exact numbers on your inflow and outflow. When you are running the business as an individual, its easy to lose track of how much you have spent from your pocket that was not generated by your business. Knowing your exact inflow and outflow means you are in control of what needs to be increased and what needs to reduce. Also, one big mistake people do is dont consider themselves as an expense for the business. Lets look at an example: If you are making 100 bucks a month and your expenses are 80 bucks and you did not consider paying yourself, the 20 bucks cannot be considered as profit. Remember to pay yourself and then look at what excess you are making. Pro tip: Data is Wealth? When you have the exact numbers in front of you, you are more empowered to take action.
- Plan and take pre-orders: This is one easy way of raising money while building scale. If you cannot place an order for 100 pieces in one go, look at how long it takes to produce those 100 pieces, break them into 4 or 5 batches and take pre-orders from customers. Offer a tiny incentive to them for booking in advance and stay in touch with the timelines. Remember: Customers are why we do what we do, so always prioritize communication.
- Have a signature all time favorite product: This is particularly helpful for people who have a small production unit and have bouts of “idle” time because of no orders. Build a signature product that is not heavy on the pocket and is very unique to your business. When the workshop is low on work load, they can produce the signature product, making sure you have good stock in hand always. Which also means that during off season, you can constantly promote your signature product and encourage people to buy them as gifts or party favors.
- Pump up your marketing: Invest every free millisecond into marketing. Make a database of prospective customers and constantly stay in touch with them. Spend time looking at your products differently. When and how do people use them, what occasions are they good for and what else can be done with them. Know that the more ideas you pass on to the customers, the more ideas they get and the more you sell. So in your own interest, generate those ideas. You cannot be too tired for marketing, if you cannot invest the money, invest your time. Its worth every micro-second.
- Tap every free channel you possibly can: Social media, emails, Whatsapp for business, Pinterest, anything that will get you eyeballs. If new people dont know you, they dont buy from you. With each post even if you are able to get the attention of just one single person, you are doing your business a huge service. No effort in marketing is ever wasted.
- Reach out to your loyal customers: As small business we have the biggest advantage of being the face of our organization and knowing customers personally. Reach out to the customers who buy from you regularly and request them to be your brand ambassadors. Ask if you can reach out to them for a little push when in need, when you have sales, new product launches or when there is a retail slowdown. If they love your products and love you, they most definitely will. If they refuse, dont take it personally. Thank them for being a customer anyway.
- Create a support system: We know the solutions to our problems, but sometimes we just need to hear it from someone else to be sure. Create that circle. Friends and family who you know encourage you and will help when in need. As entrepreneurs we tend to go on a lonely journey which need not be the case. While it is important to stay away from negative people, seek out like minded people and be willing to help them in any way you can. The best way to find support is to support someone else without expectations!
- Enjoy the process: One thing I have learnt is that nothing is permanent. Good and bad, they come and go. What what I can do is, not to get too bogged down by lows and not let highs get to my head. Keep pushing forward and just learn to enjoy the journey.
This post is actually a compilation of all the advise I have been giving to people who seek my advise. The festive season is upon us and its the perfect time to crank up your engine and get to work. If you have anything to add to what I have said here, do leave me a comment. If you think this has helped you get some clarity, do let me know.
If you want to take your hobby to the next level and turn it into a business, I have a webinar coming this weekend. Click HERE for more details.