31 Things I Learned From Running a Small Business

Running a small business arguably comes with more pressure than being a high-level player in a big organization. Both come with significant stress but running the whole show means that you're ultimately responsible for the success or failure of the whole company. There's no buck to pass, nobody else to blame, and that can be rewarding, exhausting, and terrifying.

In the two years I spent running a large, independent toy store, I learned quickly that being the boss was not always glamorous. Yes, I was in charge, but I was also the person who had to figure out what to do when the toilet backed up or how to cover when multiple employees called in sick on a holiday weekend.

An extension of having to figure out how to handle multiple situations is that you get the opportunity to lead by example. That often means taking on the least pleasant task yourself.

At the toy store, that sometimes meant directing traffic in the parking lot on rainy days or arriving early to shovel the stairs after a snowstorm. Your employees can't refuse a task that you were just performing and they're more likely to follow a leader who does not put himself or herself above the least desirable tasks.

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Yes, it's important to show a willingness to be in trenches, and that's an important way to motivate your team. That should not, however, cause you to lose focus on performing your job.

At the toy store, weekends were very busy and that's when I took on any task needed. During the week, aside from emergencies, I focused on ordering, managing, and running the business.

That may sound obvious but it's really easy to get caught up in the day-to-day camaraderie of being part of a small company. Doing that can cause you to lose focus and may have you leave important tasks unfinished.

The owner of the store where I served as general manager had a soft spot for people who were struggling. He was (and is) a kind man who often handed out second chances.

In most cases, these hiring moves were doomed to fail because the person who needed a job wasn't a good fit for the work we had available. That led to some very sad firings and us occasionally causing harm when our intentions were pure.

While you need to be careful when it comes to hiring people just because you know them, that does not mean you should not hire qualified friends, family, and past associates. Relationships are important and chances are you're running the company because you have experience in that space.

That means you almost certainly know people who might help your company. It's also reasonable to hire people you know for less-skilled roles based on past associations. Be critical and try to take sentiment out of it, but don't pass over the right person just because you have a past relationship or association.

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At a small company, fit is very important. Because of that, I often made the last step of the hiring process meeting the staff. It wasn't an interview, it was more of a conversation.

After everyone met the potential hire I would get their impressions and sometimes there was something I missed. If the staff said no, then I would find someone else. If they said yes, it made joining easier for the new person because the whole staff had some responsibility for making the hire.

I grew up in a family that owned a business that had a few hundred employees. My grandfather started the company and ran it until the day he died. He was well-liked by his employees but he also realized that he was the boss and there was a level where employees could not let their hair down with him around.

That's why when he was invited to weddings, parties, and other celebrations, he came, mingled, brought a gift, and left before things really kicked in. I followed that same logic because even though I liked my mostly-younger staff (and I'm pretty sure they liked me) they probably acted differently when I was not around. I supported their events and celebrations, but I left so the party could really get started.

At a small company you can truly know everyone who works for you. Talk with everyone and find out their hopes and dreams -- along with what they hope to get out of the job. You may not be able to make every desire come true but it's very important to know who wants a career in your field and who's passing through on the way to something else.

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The people who buy model trains are very different from the ones who play collectible miniature games. Those two disparate groups both shopped at the toy store and neither cared that much about the needs of the other.

As the manager, I had to make decisions on inventory, space allocation in the store, and what special events we might hold. To do that well, I had to understand each constituency in the store so we could balance all their needs and serve them in the best possible way.

It's easy to fall into patterns and do the same things year after year. That's a mistake and it's important to stay up to date.

In the toy industry that meant going to a couple of big trade shows and maybe a gaming convention or two each year. For other industries, there may be local or national trade shows or meetings to attend and it's important to interact with colleagues from other markets and even competitors.

Even when you're not in the office you're still the boss. That means that you're going to get contacted when things go wrong or when a big decision needs to be made. Yes, you want to empower your staff, but in some situations you're going to get roped in no matter where you are. 

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https://www.fool.com/careers/2018/07/30/how-to-handle-vacation-time-at-a-small-business.aspx

Just because you might have to take a phone call or handle a work situation while away, it's still important to take time off. Go away -- even if it's just for a few days. Make it clear to your staff what level of crisis needs to involve them calling you and then enjoy some rest and relaxation to recharge and become a better boss when you get back.

Even as the boss, you don't need to make every decision. Find areas of responsibility where you empower the people below you. Start with small things and move to bigger ones as employees earn your trust.

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It's important as a small business leader to share success with your staff. That can be as small as a thank you for a good day to bonuses or literally celebrating with a party when things go well. Don't let success become routine or for it to be taken for granted. If you do that, you can lose momentum and see your staff less willing to work hard.

Problems never fix themselves. If you have a worker who's doing something wrong, address the issue before it grows. Be direct and only make it as big a deal as it needs to be, but handle it.

Small businesses have a lot of trouble surviving if they don't have loyal customers. Try to consider what will make your customers happy and then do it.

Sometimes that can mean setting some merchandise aside you think a customer might like. In other cases, it might be invitations to special events or discounts offered to your most loyal visitors.

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No matter how many customers you think you have, you can always use more. Most communities have events that you can support, attend or exhibit at. Look for fairs, festivals, and school events where a limited budget can go a long way. You're not just acquiring customers, you're also reminding the community that you actually live there, which isn't true of your bigger rivals.

As a small business you likely have limited room for promotions. That means that some employees may overstay their welcome. It's not that you don't like them. It's just that you don't want to see someone stagnate in their job.

When that happens, sit the person down and explain that you don't see any growth potential for them and suggest that it may be time to move on. Make it clear you're not firing the person -- or even asking them to leave right now -- you're offering to help on the next step of their career.

Find out what the worker wants and if there are extenuating circumstances (like they're staying because they have outside of work responsibilities that makes leaving hard). Once you know what the employee wants, work with him or her to make it happen.

Our store was a few miles from any sort of lunch option. That was fine on a slow Tuesday but on the weekends -- when things were very busy year round -- it made it hard for staff to both get food and eat it.

To make things easier, the owner and I bought pizza or ordered Chinese at least one weekend day nearly every week. In many cases, we would also jump on the register or help customers on the floor so the staff could grab some food and a break. 

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If you don't advertise it becomes very hard to grow. We used to run TV ads during the holiday season but did radio ads and things like commercials before movies at the local theater. We also participated in coupon books, took ads in local yearbooks, and made sure about 5% of of our budget went into efforts to grow the company.

Our best customers -- people who not only shopped in the store but ran events there -- got 20% off on most purchases. Regular loyal customers and members of the various gaming and model train clubs in the store got 10%. They also got invited to special events and were treated as being important, because they were.

Make sure you have feeds on all the popular social media sites and use them. Don't just offer bland posts about sales or store hours. Share news or images that will be interesting to your customer base.

Make it so people want to follow you because your posts are interesting. Encourage people when they're in the store to follow you and reward them for doing so with some sort of bonus or discount code.

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Email may feel old fashioned but it does work and it's easy to collect signups. Make it easy to find where to sign up on your website and collect emails from customers when they are in the store.

Once you have their emails don't abuse the privilege. Send messages that are interesting and valuable. Make your weekly (or even monthly) email feel like an event where members of your list get interesting content and maybe some special pricing. Also, you should make opting out easy because the last thing you ever want to do is anger a customer.

Many small businesses are family owned with multiple generations being involved. In other cases, a not-always-there owner hires a general manager to run the operation on a day-to-day basis.

No matter what your situation make sure employees are only hearing from one voice. It's fine for a family to argue behind closed doors or for an owner to reverse a decision made by a general manager but make sure these things happen away from employees.

The last thing you want is one person giving instructions and someone else changing that right away. This can be confusing for employees at best and lead to chaos for the business at worst. 

As a small business, you should shop around for a bank that's willing to help you grow. You should look for a partner to help with short-term cash flow issues and one that will be there when you need a loan to pursue a major opportunity.

This isn't always easy to find but ideally you will have a relationship with a bank that understands your business. When that's the case, it's easier to explain seasonality or to evaluate an opportunity together.

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Stores pay a fee for every credit or debt card processed. Those fees vary and some providers will offer a great first-year deal to win your business.

It's a bit of a pain but you should shop for better rates every year. In many cases, if you get a better offer, your original provider will match or at least come close enough to make switching not worth it.

In many cases, businesses have a shorter window -- maybe only a few days -- to dispute incorrect charges or withdrawals from their bank account. That makes it a smart practice to look at your transactions and balances everyday.

During the holiday season, the toy store I used to run would generate tens of thousands of dollars in cash everyday. That's a lot of money to leave sitting in our hard-but-not-impossible to steal safe. It was also enough to make anyone bringing a deposit to the bank a target. If you have a lot of cash around, make sure it's secure and that you have safe plan for getting it deposited.

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You can't make money without customers and aside from online sales, that requires being open. Don't make a customer wait outside because it's 8:45 and the sign says you open at 9, unless there's a safety reason to keep the door closed (like floors not dry from mopping).

Be as accessible and flexible as you can. Try things like staying open later one night a week or trying extended morning or evening hours to see if they help you build an audience.

If you know an item has run its course or you made a bad buying decision, cut your losses and mark the item down. That's painful (and hopefully not something the happens too often) but sitting on bad inventory just to not have to write off the loss makes no sense.

As a small business owner you will almost certainly have to struggle, work long hours, and fire someone you like personally. Because of that, it's important to stay positive, keep an upbeat attitude, and be able to laugh even during dark times.

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