The team appreciates this article input from Franco, who we have met online and is running an online business for more than a decade already. This is based on his own experience while he was on the early stage of outsourcing his startup business.
Growing a business from its simple, humble, home-based roots can be tricky. Things can start to get awfully complex within a very short time. You’ll find yourself dealing with the issues of licenses, employees, workers comp, lines of credit, outsourcing, and other “real” business issues. You’ll find that you may not just be able to roll out of bed, put on your bathrobe, and go to work anymore. Then again maybe you can if you play it right.
Growing a home business the right way takes finesse and planning. In fact, you should have made up a business plan at the very beginning that outlined how the business would handle future growth in various stages. If you are one of those business owners who has a plan, pat yourself on the back. Despite all the conventional wisdom and advice that clearly says that all businesses need to have a workable business plan, many, particularly home-based businesses, still do not. Is it any wonder why more than 50% of small businesses fail?
The secret to growing your home business wisely is by leveraging yourself. Leveraging yourself means utilizing the time and skills of others as an extension of you, so you can be more productive. If you have five people working on a project under your direction and supervision, you now have five pairs of hands, eyes, and ears working on the project. This is leverage. Many times leveraging yourself mean giving yourself a promotion right out of the trenches, so you can run the business. This is done by utilizing outsourced services, independent contractors, and when necessary, in-house employees.
When I started my Internet company more than ten years ago, I was the only employee. I was the web designer, programmer, accounts payable/accounts receivable departments, marketing director, and president all rolled into one. It was as though I was having social anxiety in terms of dealing the workloads with other professionals. But as business grew as it rapidly did, I realized that I needed to delegate tasks and responsibilities so I can effectively run the business. I hired a creative director/web designer, a head technician, and an office assistant who also handled our billing. I then started outsourcing all our programming work to partner companies that we worked with in Canada, Israel, and Russia.
I became more of a project manager rather than a “hands on” developer, and coordinated projects among the people we had engaged on them. Finally the business had to move out of my home office. Yet I was able to stay home most of the time and run the show from there. Which was important to me.
Make a firm plan to expand your business as needed and you will see productivity, sales, and profits all increase steadily. Your expenses will increase as well, but the increased sales volume will more than cover your higher costs, as long as you’re growing wisely. Some business owners make the mistake of going from a home office to a large, overpriced office in a high-rise building downtown in one bounce. This can overextend the business and destroy its ability to maintain profitability. Grow wisely only as needed according to your set plan, and you will better be able to maintain profitability.
Some points to ponder when growing your home business:
- Have people “on deck” ready to work with you when you need them – This means creating relationships and farming out work, even when you don’t yet really need to. This is done in order to establish solid working relationships with contractors before the business tsunami comes. The time to interview and identify your potential outsources is when business is still manageable and you don’t quite yet need the help. When business goes crazy, you know you’ll have people in your camp who can handle the load .
- Understand that geography no longer has relevance, thanks to the Net – If you are able to tap a good outsource in another part of the world and work with them on-line, do it. Especially if you can save on labor costs without sacrificing quality. One of the best moves I ever made was take on a programming shop in Siberia to do much of our smaller programming projects. What was really great about it was that their daytime was our nighttime. Clients would give me a programming job or modification, and many times it would be done by the next morning. Since the Russian programmers worked on the project during our nighttime, completions were amazingly fast. The clients loved our turnaround times, were happy with our work, and we saved big on programming labor. Everybody wins.
- Market yourself professionally! – When marketing your business, always market yourself as a professional company capable of taking on any size project, even if you are just one person. Go by a company name, and not your personal name, this is a common mistake. Being a corporation or LLC helps your professional image. As growth demands, hire an office assistant who can handle your calls and appointments. It will greatly enhance your professional image and help you optimize your time. If your business requires you to meet clients, then consider renting a small office in a commercial office center that will allow you to utilize shared conference rooms, secretarial services and so on as needed.
- Be prepared to hire employees – At some point, you will need in-house help to handle various office or shop tasks. Be ready for it and figure out the best scenario for you and your business. Often, low-cost space rented at an office park or office center will suffice. There are no long-term leases, and you can move the office whenever needed to more space if and when the time comes. On the flip-side of that, you can get out of the space fast if business takes a dip and you can no longer handle the cost.
- Build your organizational skills! – You will need strong organizational skills when managing multiple projects, departments and people. Figure out a good way to get and stay organized. I find a white board on one office wall helps keep things organized and keeps info available at a glance. Use teleconferencing, instant messaging, skype and email to maintain communication with your people and outside help. Remember, the people working with you are your team, and you’re the quarterback. You call out the plays.
- Know when to give up the reins! – At some point your business may get too big for you to run yourself. If that’s the case, be honest with yourself, know your limitations and have a plan in place to deal with this possibility. Hiring a professional manager or executive may be the way to go. Then relegate yourself to a position where you can be the strongest asset to the business. Selling or merging with another company may also be a worthy option. Make sure you’re aware of all the options you have in this case. There’s absolutely nothing wrong with cashing out of a successful business at the right time, and/or letting others continue to grow it for you.
Use leverage, surround yourself with good people, watch your expenses and let your business grow according to your plans. Whatever you do, don’t be afraid of growth. Properly managed, it’s a great “problem” for your business to have.