What I Learned Running a Small Business in 2019

At the end of 2019, I spent some time thinking about our company. Partly because it was the end of the year and reflection always seems the right thing to do around 31 December but also because in 2019, the management assumed control of the company.

In some ways there is no difference being the CEO of someone else’s company and being the CEO of your own company. However, in some ways it’s very different. Not the least of which is the stakes are a bit higher. If you make a mistake with someone else’s company there’s someone else holding the bag. If you make a mistake with your own company the blame is your own. In the words of Ben Horowitz (who has penned potentially the greatest book on leading a business ever written, The Hard Thing About Hard Things):

“Everybody learns to be a CEO by being a CEO. The only thing that prepares you to run a company is running a company. You will face a broad set of things that you don’t know how to do that require skills you don’t have. Nevertheless, everybody will expect you to know how to do them. Even if you know what you’re doing, things will go wrong. At a certain size, your company will do things that are so bad that you never imagined that you’d be associated with that kind of incompetence. Seeing people fritter away money, waste each other’s time and do sloppy work can make you feel bad. If you’re the CEO it may well make you sick. And to rub salt into the wound and make matters worse, it’s your fault. Every problem in the company is your fault.” 

That is exactly how it feels. Tight cashflow, changes in the marketplace, whether to hire more people or give everyone a raise, whether to work with this person or that organisation. Some days are so bad don’t just want someone to hand the bag back you want to dump it on some stranger’s doorstep, ring the bell and then run away. And yet…

Here we are. It’s 2020 and most days aren’t like that. In fact, very few days are like that and a few days will be like that no matter what work you do. “Small business,” said some unknown sage. “Isn’t for the faint of heart. It’s for the brave, the patient and the persistent.” Brave, patient, persistence. That very much describes 2019. (Heck, I think that describes much of 2019 for a lot of people. Eh Greta, Jacinda and Kamala?)

When I think about what I’ve really learned in 2019 I can narrow it down to 5 things. Cause, well, 5 makes a really good list. So here are my top tips for heading up a small business:

1.

Don’t start, or takeover, a business unless you love business. I don’t mean what the business produces or does – that’s easy to get excited about but I mean the actual running of the business side of the business. I mean VAT filings, risk registers, HR policy, data protection, insurance tenders, document filing systems, finance reporting and projections, and team meeting topics. Ok, so no one loves VAT returns (sorry HMRC) but if you can’t, at least, passively tolerate or, at most, have some genuine interest in these things then running a business is not for you. All of these things will be constantly demanding your attention, sucking your energy and each day will become one more in a draining battle between doing what the business does/produces and all the actual running of the business. Ignore the business side of business long enough and the entire business will fall apart. You’ll get ripped off by a dodgy supplier who realises you’re not on top of invoicing. You’ll not notice the market has gone in another direction. You’ll hire people who do shoddy work but they’ll be so cheap you can’t afford anyone else. It won’t catch up with you overnight but it will catch up with you.

2.

People will always be your biggest problem but there’s no business that isn’t made up of people – employees, contractors, suppliers, vendors, accountants, lawyers, other businesses, and customers. Only get into business if you like solving other people’s problems because that is what you’re going to do all day, most days. People are going to whinge, complain, try to manipulate you, experience sickness and tragedy, ask silly questions and make ridiculous demands on your time energy and resources. People are also going to be your friends, support you, give you great ideas, champion your cause and make it worth running a business day after day. If you’re in a healthy business the latter will outweigh the former.

3.

If you don’t know why you’re in business, or the reason you are in business doesn’t resonate with what you (and your team) value, then your business will meander pathetically and half-heartedly. Many small businesses don’t have a reason to exist beyond to provide profit to the owners and a wage to the employees. These are not bad reasons for a company to exist and more companies should celebrate that this is what they do. But, when we thought about it none of our team found that very motivational. Pretty early in 2019 our team sat down and set out the five things we value – the things which motivate us, which allow us to enjoy our work, which dictate the work we do and, more importantly, won’t do. Not a single person brought up the words ‘profit’ or ‘big pay check’. Don’t get me wrong, we want everyone who works with us to have a fair wage and we want to be as generous as possible but when we say we’re a values-driven company we mean it. No one we work with comes to work because they dream of building the biggest, fastest, richest company ever.

4.

Attention is our greatest, and least utilised, resource. I originally thought that running a business meant being the best multi-tasker ever. I would need to be constantly fire-fighting, accessible to everyone (especially clients) and have one toe or one eye in, or on, everything. This couldn’t be further from the truth. The greatest thing I believe that any of us have – that any of us can bring – to any question, concern, topic or issue is our whole focused attention. It is unbelievable what a single human can solve when we apply our whole attention to the thing before us. And then, imagine what can be done by bringing focused attention over time. We’re virtually unstoppable. I have found that half of my problems endure simply because of a lack of adequate and real attention to them.

5. 

Learn to love finance. And fast. I’m not saying you should hire someone who is good in finance. You need to LEARN finance. You don’t need an MBA but you do need to spend your evenings learning how to read a Profit and Loss Statement. You do need to Google how to read your company accounts so you can ask your accountant legitimate questions about the health of your business and understand what she says in response. You need to understand the difference between what’s on your books (company accounts) and what’s in your bank (cashflow).  You need to understand where your money is coming form, where it’s going and why.

I hate maths. I would get picked last for any maths team out there but I have learned as much about finance as I possibly can and still learn as I go. Why? Because finance is the dark art of business. A dark art practiced predominantly by the patriarchy. Men love nothing more than talking a load of s*%t about finance to women because they expect that we either won’t understand it or we will be intimidated into not questioning what they say. But finance lies as the heart of what makes a business tick. Not profit, mind you, profit and pursuing money have nothing to do with finance.  If you want to understand any business you need to be able to unpick the finance and see where the dirty laundry lies.

So, after eight months of running our own company that is what I have learned. I’m standing by for what we’ll be learning in 2020.