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You've launched your microbusiness and started marketing. If your microbusiness is something people want and your marketing efforts are working, you'll have your very first customers, visitors or clients. As your business grows and starts to thrive, your work shifts dramatically: from setup and launch to actively growing your microbusiness. You essentially become an employee of the microbusiness you've created.
This phase of your business is just as important as the setup and launch. It can mean the difference between growth and stagnation, excitement or boredom, and ultimately, success or failure.
Protecting Your Microbusiness
There are certain things your microbusiness must have to protect itself in the long-term. It's important to put these in place as soon as possible, but many microbusiness founders skip them because they seem hard or boring. They are:
- Consider incorporation. Incorporating your business means that it becomes a separate entity, independent from you. This gives you a number of legal and financial protections and ensures that whatever affects you does not affect your business, and vice versa. It may, however, expose you to corporate taxation. You should research whether incorporation is right for your microbusiness, preferably with an expert.
- Separate finances. Regardless of whether your microbusiness is incorporated or not, you should maintain separate finances. Having your microbusiness earnings deposited directly into your personal bank account will make it very hard to keep accurate records and stick to your budget. It is easy to open a business bank account, use a business credit card, and create a separate business PayPal account.
- Proper financial records. These are: an income statement, balance sheet, cashflow statement and budget. Regardless of how small your microbusiness is, these records form a critical â€˜dashboard' you need to assess its health. If you decide to sell your business in future, good financial records will be extremely valuable. There are free templates available for each of these documents: income statement, balance sheet, cashflow statement and budget.
- Maintain a business plan. A business plan should be a living document and ongoing record of your business. Years down the track, you will be very glad you kept such records. If you decide to sell your business, a potential buyer will appreciate being able to see how it grew and changed over time, and to see your revenue and expenses over the lifetime of the business. We covered how to write a great business plan in a previous post.
- Have easy access to essential metrics. What those metrics are will depend on the nature of your microbusiness. For a website or blog, pageviews, visits and traffic from organic search. For an online retail business, conversion rates and sales data. For a web app, new users, conversion rates and week on week growth % are essential. For a self-publishing microbusiness, sales. There should be one place where you can go every morning to check up on the health of your microbusiness by assessing these metrics.
Dedicate a week in the early days of your microbusiness to evaluating and, if necessary, setting up these pieces. It might be a schlep, but your future self will thank you for giving your microbusiness a firm, safe foundation to grow from.
Wearing Many Hats
As an early-stage microbusiness owner, you're most likely fulfilling all the roles your business needs:
- Product Manager. You need to keep a close eye on how well your product is meeting the needs of your customers, visitors or clients, and manage small projects to improve your product.
- Analyst. As a microbusiness founder, you should be aware of the key metrics that matter. How many new visitors are you getting per day? How many sales? What is your conversion rate? What is your growth rate, week on week? How many users?
- Marketer. In the early days, you'll feel like a one-man or woman promotional army for your microbusiness. If your product is awesome, your users will eventually start to share some of this burden by promoting for you.
- Development Manager. If you didn't build your microbusiness, you're still probably working with technical people to fix bugs, make changes or customize your product. You may find yourself in the position of being a non-technical person trying to manage and give instructions to web developers, and manage the time, costs and final outcome of web development projects.
- Customer Support. A side-effect of success is that you'll be solving more problems for your users, especially if they're paying you. You may find yourself filling the role of a one-person customer support team.
- Bookkeeper. If your microbusiness is successful, it's probably making a little bit of money. At the least, you'll have some records in PayPal or your bank account of financial transactions. At best, you're maintaining the key documents every business needs for proper record keeping: an income statement, balance sheet, cashflow statement and budget.
Wearing many hats in the day-to-day running of your microbusiness allows you to exercise many different skills. If you get bored with one type of work, you can switch to another.
Most importantly, you'll gain a good understanding of each aspect of your business. Before you replace yourself on any of these tasks, time spent in the trenches will help you understand exactly what's needed to do a great job in the role.
You avoid management by doing all necessary tasks yourself, and you keep expenses very low. Your business can run effectively from wherever you are.
Let's take a moment to tell the story of a hypothetical night for a hypothetical microbusiness owner.
It's 3:23am when a piercing sound wakes Alex from sleep. She rolls over and picks up her phone from the bedside table. Her vision clears and reveals a text notification that her web app's servers are down. Below it, she sees that emails have already started flowing in from disgruntled customers.
She pulls open her laptop and gets to work diagnosing the problem. In another tab, her business inbox is slowly filling up with emails from unhappy customers in other time zones who rely on her app.
After half an hour of fruitlessly trying to fix the problem, she reboots the server, and the problem seems to be gone. She then starts to respond to some of the emails from angry customers. Most can be appeased when she explains the server outage, but some have asked for refunds. She processes the refunds in PayPal and updates her records in Quickbooks. She writes and publishes a brief blog post on her app's blog, explaining and apologizing for the outage. By the time she crawls back into bed, it's 6:20am and the sun has just started to rise.
While this is a bad scenario, almost every business founder will tell of similar times where an urgent problem in their business kept them awake at night. In a larger company, issues like this can be spotted and resolved while the founder sleeps peacefully. On-call developers are notified of the outage, and the customer support load is handled by a support team working across time zones. The founder's only exposure to the issue might be an email in their inbox the next morning.
The smaller your business, the more responsibility you bear directly for solving problems. Though it can be extremely rewarding, running a microbusiness is a tough gig.
While wearing so many different hats, your days might be unstructured and involve lots of multitasking and context switching. You get an email from a customer (customer support hat), then an email from a blog that wants to write about you (marketer hat), a Moz Pro report (SEO hat), then a PayPal invoice (bookkeeper hat), then a New Relic report that your website is running too slowly (developer hat). It can be easy to while away your days rapidly switching between hats without making progress on what is important.
Doing It Better
Batching is common advice for any business owner, but it applies to a microbusiness owner more than anyone. Rather than rapidly switching between roles, try to set aside a chunk of time each day to deal with the challenges of each. For example:
- In the morning, check analytics and look for trends and interesting data about your business (analyst hat).
- Respond to customer emails (customer support hat).
- Update social media and your blog (marketer hat).
- Send emails to blogs and websites that you'd like to write about you (marketer hat).
- For the second half of the day, work on improving your product and developing new features (development manager hat).
- Before the end of the day, keep a record of new invoices and check revenue (bookkeeping hat).
This structure will help you give adequate attention to each of these important roles without excess context switching.
It's easy to get bogged down on "maintenance" activities for your business, especially if it's doing quite well. Maintenance activities are things that you must do to keep your customers happy and your business running, but that doesn't open up new opportunities for your business, or make your product better. These are activities like answering email, fixing bugs, updating social media, and updating your records.
You must find ways to dedicate most of your day to improving your business and product. If you're so bogged down with maintenance that you can't do this without working too-long hours or letting the day-to-day running of your business slide, it's time to make your microbusiness a little less micro and get some hired help.
During your day-to-day running of your business, set aside an hour each day to learn skills that will help you get better at your business's most important tasks. One day you might learn more about customer service, another day you might learn how to better work with developers. This time is an investment in your microbusiness, and in every future business that you run. You must, however, make sure that you don't get carried away learning and don't spend enough time doing.
Below are some of my favorite resources for learning:
- Hacker News - startup, web app and development focused.
- Smart Passive Income - blogs, niche sites, affiliate sites and podcast focused.
- Moz Blog - excellent SEO blog.
- Social Social Media Examiner - great blog on social media marketing.
- A Newbie's Guide to Publishing - premiere blog about self-publishing (fiction focused).
In the next post in this session, we'll dig into strategies for scaling your microbusiness without losing the things that help it to fit with your lifestyle.