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The Size of Success: A Profitable Business Doesn’t Require a Big Business

The first Monday of each month, I dust off a favorite post from the Bennis Inc Blog archives and give you another chance to enjoy the wit and wisdom that’s been shared. Enjoy this month’s treasure – and if it inspires you – be sure to share it with family and friends!


GoldfishWhenever someone asks me what I do for a living, I’m finally at a point in my life where I’m excited and proud to tell them about my entrepreneurial journey and some of the great experiences it has provided along the way.

When I held previous jobs and was asked this same question, I always felt as though I was making excuses, downplaying my position or glossing over my current career to talk about the career I one day aspired to have. It’s an incredible feeling to be living your passion every day as a small business owner, but I believe some misconceptions still exist about our measure of success. This most often rears its head when the inevitable follow-up question to owning my own business is, “How many employees do you have?” The unexpected truth is, it’s just me. I’m a sole proprietor, or S-Corp, and I’m small by my own design.

Small By Design

Not every business will or should follow the template of growing by X number of employees every year. The fact of the matter is that it’s not every business’s model to grow in this direction. Depending upon the service or product, it’s simply not necessary. And if it’s not necessary to have this many employees, why carry the extra overhead and liability?

Outside of my residual monthly clientele, new or one-time projects for which I’m contracted are very unpredictable. In one day I can receive multiple new leads or things can be quiet for weeks. As a business of one, I’m able to tuck my tail and reduce my overhead to nearly zero when I’m in a business building phase. And when I’m swamped with work and requests for services, I can easily call upon my network to contract out certain work that’s more efficiently handled by their expertise.

I love contractors and freelancers for the very same reason I am one to so many businesses. When times are great you can go full steam ahead and as soon as work slows down, you can cut back and preserve precious capital. Bigger businesses can’t do this as easily. They’re stuck with fixed expenses like rent and salaries that need to be paid regardless of cash flow. Another major benefit I see to being a business of one (at least for right now) is that I am accountable to my clients and that’s all. I don’t have to worry about keeping regular office hours to also be accountable to employees. I can travel as I please, work from home, set my own schedule and take vacation without the slightest sense of guilt so long as I maintain my work for my clients.

While being small by design is not a luxury every type of business can afford, I highly recommend enjoying it for as long as you can. So long as you don’t measure your success by the size of your office or staff, this is a very strategic and enjoyable model for an entrepreneur.

The Measure of Success

What do you commonly use as the measure of success for a business? I know before I began my own, I was guilty of asking the common questions of “How many employees do you have?” or “Where is your office located?” to judge the legitimacy of a business. I’ve since had my eyes opened to the endless varieties of business structures that exist and most surprisingly is that I really have not found a strong correlation between size, structure and success. What I have found is a strong correlation between success and the type of leader running the business.

Having been down a similar path, I’m now profoundly more impressed with a small business (especially those consisting of one person) that provides the same perception and level of service as a firm two or three times its size.

At the end of the day – or the fiscal year, rather – the profitability and success of a business is not determined by the number of employees or square footage of your office space. What it is determined by is your drive and dedication to seeking out new clients, providing exceptional service and functioning above the level of your competitors. And for me at least, I can efficiently and comfortably accomplish this right from my home office!

Have you ever owned or worked for a business that was small by design? How did you measure your success if not by the number of employees or size of your office? Share your thoughts with us by commenting below!

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Can You Earn a Million Dollars Honestly?

million dollars

Is Ben Franklin congratulating you or judging you?

You may have heard this quote from William Jennings Bryan, “No one can earn a million dollars honestly.” It’s quite a bold statement to make. Millionaires across the globe might take more offense to such an accusation…if only they weren’t already too busy enjoying their lavish vacations and  luxurious lifestyles. Joking aside, I wanted to dive a little deeper into the idea of whether or not you can earn a million dollars honestly. As a business owner and an aspiring millionaire (I can dream), I worry that such a big income carries an even bigger price tag. Must we compromise our values or risk selling ourselves short in pursuit of those six zeroes?

Earning a million dollars is something many of us will do over a lifetime. Spread out over years of work, it won’t make you a millionaire and – in this economy – it won’t afford you that stereotypical millionaire lifestyle either. My concern is that during our years of chasing after a healthy income, can we do so honestly or will we inevitably contradict some aspect of our business moral code? Here are two key instances in which I feel like though the money is “earned” it is not earned honestly.

Are you selling yourself short?

In an effort to sell as much as you can of your products, services or time, sometimes what you’re actually doing best is selling yourself short. You must always maintain a value for your time otherwise you risk giving it away for far too cheap or wasting it completely. For example, in an effort to gain a client, you may lower your prices. You may make that immediate sale, but you actually lose money in the long run with the opportunity cost of a future client that’s willing to pay you market value. I find this to be one of those instances in which the money earned here isn’t quite “honest.” Sure it’s in your bank account, but you’re left with a time deficit for what you’ve invested versus what you were paid. One way or another, you will have to reconcile this imbalance in your business ledger.

Are you doing a disservice to others?

I talked about selling ourselves short, but what about selling our clients short? This is another instance in which money is not quite earned honestly. For example, if you overcharge for your services, overbook your time or over promise your results all in an effort to earn a greater income, this is not money earned honestly. It is also a disservice to the client as much as it is to your business for they’re not likely to return to you in the future. You may have earned a small profit from them now, but in the long run you have missed out on a growing relationship and bigger opportunities.

I do believe that a million dollars (or more or less) can be earned honestly. But to do so, we must remain aware of the temptations that exist to cut corners or rush along the natural process of increasing our earning potential. This is no easy feat as dishonesty can be cleverly hidden or attractively wrapped inside good intentions. However, if we approach every decision and every client with the same level of integrity, we just might someday join the ranks of honest millionaires.

 
 

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The Size of Success: A Profitable Business Doesn’t Require a Big Business

big fish little bowl, small fish big bowlWhenever someone asks me what I do for a living, I’m finally at a point in my life where I’m excited and proud to tell them about my entrepreneurial journey and some of the great experiences it has provided along the way. When I held previous jobs and was asked this same question, I always felt as though I was making excuses, downplaying my position or glossing over my current career to talk about the career I one day aspired to have. It’s an incredible feeling to be living your passion every day as a small business owner, but I believe some misconceptions still exist about our measure of success. This most often rears its head when the inevitable follow-up question to owning my own business is, “How many employees do you have?” The unexpected truth is, it’s just me. I’m a sole proprietor, or S-Corp, and I’m small by my own design.

Small By Design

Not every business will or should follow the template of growing by X number of employees every year. The fact of the matter is that it’s not every business’s model to grow in this direction. Depending upon the service or product, it’s simply not necessary. And if it’s not necessary to have this many employees, why carry the extra overhead and liability? Outside of my residual monthly clientele, new or one-time projects for which I’m contracted are very unpredictable. In one day I can receive multiple new leads or things can be quiet for weeks. As a business of one, I’m able to tuck my tail and reduce my overhead to nearly zero when I’m in a business building phase. And when I’m swamped with work and requests for services, I can easily call upon my network to contract out certain work that’s more efficiently handled by their expertise. I love contractors and freelancers for the very same reason I am one to so many businesses. When times are great you can go full steam ahead and as soon as work slows down, you can cut back and preserve precious capital. Bigger businesses can’t do this as easily. They’re stuck with fixed expenses like rent and salaries that need to be paid regardless of cash flow. Another major benefit I see to being a business of one (at least for right now) is that I am accountable to my clients and that’s all. I don’t have to worry about keeping regular office hours to also be accountable to employees. I can travel as I please, work from home, set my own schedule and take vacation without the slightest sense of guilt so long as I maintain my work for my clients. While being small by design is not a luxury every type of business can afford, I highly recommend enjoying it for as long as you can. So long as you don’t measure your success by the size of your office or staff, this is a very strategic and enjoyable model for an entrepreneur.

The Measure of Success

What do you commonly use as the measure of success for a business? I know before I began my own, I was guilty of asking the common questions of “How many employees do you have?” or “Where is your office located?” to judge the legitimacy of a business. I’ve since had my eyes opened to the endless varieties of business structures that exist and most surprisingly is that I really have not found a strong correlation between size, structure and success. What I have found is a strong correlation between success and the type of leader running the business. Having been down a similar path, I’m now profoundly more impressed with a small business (especially consisting of one person) that provides the same perception and level of service as a firm two or three times its size. At the end of the day – or the fiscal year, rather – the profitability and success of a business is not determined by the number of employees or square footage of your office space. What it is determined by is your drive and dedication to seeking out new clients, providing exceptional service and functioning above the level of your competitors. And for me at least, I can efficiently and comfortably accomplish this right from my home office!

Have you ever owned or worked for a business that was small by design? How did you measure your success if not by the number of employees or size of your office? Share your thoughts with us by commenting below!

 

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