If you’ve ever dreamed about working for yourself or starting your own business, this two part series is for you. Part one looked at how the traditional view of what makes a successful business is changing beyond recognition. It also outlined the old Five Commandments of Business.
If you have a business idea floating around the back of your mind, Part 2 is about how to plan to make that into a sustainable business.
3. Going beyond growth – the sustainable business
The old Third Commandment of Business states that the aim of a business is to get as big as possible as quickly as possible.
The assumption is that bigger is better. Bigger means scale and competitiveness, maximizing the ability of a business to generate profit.
As a prospective business owner, I felt the invisible hand of pressure on me to start building a fast-growing empire as quickly as possible. The expectations of “other people” weighed heavily on my mind – will my fledging company be impressive enough for the world?
Now I’m seeing that for many business owners in the 21st Century, more importance is placed on building a sustainable business that can stand the test of time, rather than simply growing as big as possible. Some of the reasons for this choice include:
1) Growing too quickly can be risky - taking on overheads too quickly and overstretching finance. This has brought many new and established businesses to their knees.
2) Most people with a business idea are passionate about whatever product or service they are selling – they enjoy being a practitioner. Many business owners don’t want to grow to the point where they become a full time manager rather than doing what they were passionate about in the first place.
3) Many business are built in niche markets. These businesses can be very successful and provide a great living for their owner on a small scale – the market isn’t large enough to support a corporate behemoth.
For all these reasons and more, its now ok to plan for slow and sustainable development of a business. Chris Guillebeau had the vision to earn the median salary in his Zip-code from his lifestyle business, the Art of Non-Conformity.
So don’t let the growth principle put you off. If you decide that you are quite happy as a solopreneur, consultant or running a small sustainable business then plan to do it your way.
4. Bootstrap and collaborate your way to start-up success
The last two Commandments relate to perceptions around what makes a proper business – raising investment money and hiring employees.
Common wisdom is that “you need to speculate to accumulate”. The more of your and other people’s money you can throw into your business to get it off the ground the better.
This allows you to go out and find swanky premises, hire lots of smart people and get your message out to the world in flashy adverts.
This approach can be extremely risky. You only have to watch Dragon’s Den for fifteen minutes to come across enthusiastic entrepreneurs who have invested thousands of their own money (or investors money) to design, patent and build lots of their new product.
Yet, in the rush to get to raise capital and get to market, they didn’t test their idea to see if it actually works. Although occasionally you can get away with it….
Fortunately, there are other ways to build a business. I’ve learned a huge amounts from entrepreneurs who have bootstrapped their business without ever borrowing any money (in fact that is the model I’ve adopted for Less Ordinary Living).
By keeping costs low and reinvesting money generated by the business it is possible for many business owners to manage risk and build a sustainable and succesful business.
The same principal applies to the need to hire people to have a proper business. As more people work for themselves as consultants and set up small businesses there is a talented pool of labour available for you to rely on as an entrepreneur.
Hiring employees is a fixed cost – finding others to collaborate with on projects, or hiring expertise when needed is a much more flexible way to build a business.
I’ve had untold help from experts on marketing, PR, copywriting and blogging to help me build out Less Ordinary Living for which I’m hugely grateful. A real business can be one person with a large network of others to provide support and expertise.
These concepts lower two of the biggest barriers to entry for you turning your idea into working for yourself.
Without the need to raise huge amounts of finance or hire others, you can start small and build your business sustainably.
Why not start now?
If you’ve been dreaming of working for yourself or turning your idea into a business, there has never been a better time. The old rules of business have been blown away.
Building a sustainable enterprise with purpose, that supports your lifestyle need not be a huge risk.
Often the best way is to start out by testing your idea as a sideline whilst you’re still employed. You can develop and test the market and your concept before you take the risk to go it alone.
If you have an idea for working for yourself that you’d like to turn into a start-up and you’d like to brainstorm it, I’d be happy to have a chat and see if I can help – please use the contact form on this page to get in touch.
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Over to You
What is your take on building a business in the 21st Century? How important is growth? Do you need investment and employees to have a real business?
Please share your thoughts and leave a comment.
Photo credit: Thunderchild5 (Flickr Creative Commons)