Did you start your business as a side hustle or jump straight into it?
Here's a crazy statistic: 45% of working Americans currently have a side hustle. According to self.inc, the average side hustle brings in $897.04 per month. That's an extra $10,000+ per year. These micro businesses are not large enough to support a single person on their own for the first few years, but side hustles can grow into sizeable companies as they evolve.
Still, many businesses are started with the intention of growing into larger enterprises. Yet, it's commonly touted that most small businesses fail within their first five years.
So, how long does it take to build a successful business?
We've Got to Understand Why Businesses Fail to Begin With
According to Investopedia, there are a few main reasons that most small businesses fail:
- Financing hurdles
- Inadequate management
- Ineffective business planning
- Marketing mishaps
These are reasonably straightforward ideas to understand: small businesses are rarely flushed with plenty of cash or cash reserves, so they can quickly run out of money. Management or the owner has to deeply understand how to run and maintain their business or have enough time to learn by doing. A small business must be built on an effective plan with suitable direction, which is something that develops and changes over time. Lastly, an effective marketing strategy is necessary for new clients to learn and understand why they should hire a small business in the first place.
These reasons come back to one overarching reason: most businesses simply run out of time.
Time is the business owner's most precious resource: it can never be gained back once spent. The time we invest in our businesses is crucial; we have to ensure that every move we make is the best use of our time and makes the most impact on our business.
Money is often tied very closely with time for small businesses. When a small business begins, it typically has very little capital. This inadvertently creates a ticking clock: find a way to generate more money before you run out of time.
For example, ill-equipped management (or an inexperienced owner) is also often blamed for business failure. When an entrepreneur starts a new business, they usually have some experience they can bring into the new venture, but much of entrepreneurship is a learning experience. There's limited time to figure out how to run a business well.
Business planning shifts and changes according to seasons, economic conditions, and more. What starts as an excellent plan can quickly divert into chaos. It takes experience and, you guessed it, time to adopt a new strategy when the original has gone awry.
Finally, marketing can be one of the most challenging components to get right when starting a new business. It takes months of tracking data and analyzing results to identify whether or not a marketing strategy is effectively bringing in more money to a company!
How Can We Make More Time?
Time is a finite resource: there's only so much that we, as small business owners, can do to use it wisely! We'll never be able to create more time once it's been spent, but there's good news: we can free up our current time to work on the most critical tasks, making a big impact on our small businesses.
When you first start a business, you must create systems and processes that can grow with you as the business owner. Systems allow you to decide the Standard Operating Procedure (SOP) for how your company will do every task. From customer service to sales, you can create a consistent system that can be easily used with every client. Since you're the only person running the business at first, you'll be able to identify how this work should get done in the most efficient way possible.
When your time gets stretched too thin, and you can no longer focus on growing the business, it may be time to hire a new employee. Hiring help allows you to take a step back and focus on growth. Your new employee can take over the systems and processes that you've built previously! This is an incredible opportunity to make your processes more efficient than before as you begin to introduce more team members.
Slowly you can begin buying back your time in the business by creating opportunities for others. With your time freed up, you'll be able to focus on building the business, acquiring new clients, developing new plans and strategies, testing out different marketing theories, and more.
Remember, money is a measurement of your business's remaining time. Keeping your eye on the cash you're spending allows you to understand what areas you can grow in, how much time you have until your business is no longer operational, and how to leverage that money to free up more of your time.
The only way to improve your company is by understanding your money, keeping track of your time, and, most importantly, not giving up.