5 Signs of Small Business Success
To a small business owner, growing pains are make-it-or-break-it moments. With all the resources available to small business owners, I think growing pains are more cause for celebration. I think of them as signs of success—they’re good problems to have. I’ve jotted down 5 signs of small business success, along with some quick advice on how to turn those roadblocks into opportunities for greater growth.
- Shift from scarcity (resources, customers, cash, etc.) to plenty (or too much.)
It turns out you are not alone. U.S. small businesses did well last year and are expected to do even better in 2016. Businesses with less than $5M a year in revenue experienced on average a 7.8 % increase in sales growth during 2015. The profit margin rose, for the fourth consecutive year, as well, from 6.4 to 7.5.
Things may be good, but how to you support that kind of growth? That brings me to the next point.
- Shift from hyper-growth to a plateau (How do you maintain growth?)
As a tech person, I tend to look at spending on technology to see what’s really going on in the business world. Spending on business technology is expected to rise 6.7% to $2.1 trillion by 2017 compared with last year, according to a Barclay’s research report.
Businesses, in 2016, will spend the largest amount of capital on Business Intelligence (BI) software, as their focus shifts from attracting customers to maintaining their loyalty. Their aim is to use BI to sift through the data to provide customized experiences to a loyal customer base.
- Shift from flat structure (everyone does what it takes) to the need for more organizational structure.
One weapon that small businesses have at their disposal is outsourcing. Susan Solovic, author of The Small Business Expert, predicts that among the top 10 trends for small businesses will be outsourcing and virtual offices. As the Internet opens up the possibility for collaboration from multiple locations, small businesses can draw from top-tier talent pools to get the specific services they need without the headache of payroll taxes and insurance.
- Change from controlled chaos to organized process (to liberate, not constrain.)
In that software spending report I mentioned above, business will spend the second most amount of money on organizational software, like CRM, document share and cloud storage. Software forces you to structure a process and train the end users on that process. Workflows are inherently built in and business units are unified, rather than siloed. This cuts down on redundancy and economizes time, freeing up more hours for generating more revenue.
- Shift from CEO/Founder/Owner from the business life-encompassing to having a team of trusted advisors – working “on the business” vs. “in the business”
2016 will see massive growth of coaching services and mastermind groups, as CEOs and entrepreneurs desire to generate passive income rather than kill themselves in the day-to-day grind.
Zappos CEO Tony Hseih fired all of the managers at his company to establish a Holacracy, which works like a coaching model. The idea is that the organization will benefit more from one coach/mentor checking in for an hour each week with 40 self-governed employees than from one hiring and firing manager micromanaging 10 employees.
Small business all experience the same 5 changes as they grow, but the shift has gone from bemoaning the lack of organization in an organization to using a myriad of resources available through software, outsourcing and coaching to streamline and scale a business. It’s all there—you just have to make use of it!