Small firms … small businesses … entrepreneurial businesses: Are they all the same thing? No!
Some firms are small because they haven’t grown large yet. It doesn’t mean they don’t want to grow. Yet, some other small firms – the majority of ’em – are small because their owners don’t want to grow.
There may be good reasons to remain small. It’s more controllable. It’s more relaxed. You can be pickier about your clients and projects. You know everyone. It’s all about “you.” Once you commit to a vision and plan for growth, it’s a whole different ballgame. You cannot comingle your business and personal stuff – there may be other owners involved. Debt may be necessary. That requires signing personal guarantees that you might not want to sign. And, with more people comes more problems.
Anyone who has read The Zweig Letter over the years or been to one of our seminars or worked with me as a consultant knows I am a fan of growth. It’s just easier to keep everyone motivated and be profitable when you work in a growing company. Along with size you get better people – people who are more specialized in the areas you need them to function in. And that makes your job easier. Not to mention growing firms – larger firms – are worth more than small, declining companies. And it’s nice to have a pot of gold at the end of the rainbow.
But hey, I’m a realist. Not everyone beats to my drum. Some folks want to have a small company, and that’s the way it is. If you are one of those people, let me give you my best advice. Here it is:
- Get a really good person to help you. This could be your COO, yourCFO, or even a really good administrative assistant. But the bottom line is you need someone you can absolutely rely on to channel your thinking and act on your behalf when you need them to. And you will need them to!
- Get a good accountant. Taxes – and how to avoid them – are a big part of small business management. You want to work with someone who truly understands what you are trying to do and gives you good advice that maximizes what you can take out of the business.
- Get a good attorney. Problems are going to crop up with contracts, clients who don’t pay, and other things. A good small business attorney will take a lot of this load off your back. Find someone who is young enough to work with you and won’t retire before you.
- Get a good accounting system. You don’t need to have a mega system, but even small firms can benefit from good project cost accounting and integrated timesheet and expense reporting – at a minimum – not to mention automated invoicing. This isn’t expensive, and you don’t want to have to make up something on your own.
- Set some reasonable hours to be at the office. Even though you are small, you’ll have other people working with you. It’s important they don’t see you as lazy or unmotivated. Or, guess what? They will become lazy and unmotivated. “Do as I do” is always the best practice.
- Look like a successful firm. It’s one thing to be small. It’s another thing to look like a loser. No good client wants to work with losers. You have to maintain some minimum standard with your clothes, vehicle, and office – basically, anything that other people see.
- Keep learning. Take classes. Go to seminars. Be active in your professional society or association. Read. You cannot allow yourself to stop learning just because you don’t want to have a large firm.
- Keep teaching others. It’s one of the best ways for you to learn and stay fresh. But, besides that, it is a good way to help other people feel like they didn’t sell their own careers short to work in a small firm, because you let them learn. One of the best aspects of working in a small company SHOULD be role-diversity and the ability to learn. Make sure that’s real in your firm.
- Don’t get too greedy. You may not have many employees, but the ones you have depend on you to provide them with a decent living. Respect that and treat them accordingly. And the people who really make your life better and easier? Reward them!
I’ve got tons of advice for small firm owners. If you have any specific questions that you are struggling with, email me. I’d be glad to try to help!
Mark Zweig is president and CEO of Zweig Group. Contact him at firstname.lastname@example.org.
Did you know Zweig Group produces a survey about firms with under 50 people? You can find out more info here…