Recently USA Today ran a poll and asked sole proprietors what their primary challenge was in running a small business by themselves. If you work solo or are about to leave the corporate world to pursue a small business, you may soon discover that one of these top five challenges could “make” or “break” you.
But not to worry! I’ve been there and I know a thing or two about overcoming these challenges.
Problem No. 1: Inability to focus on generating new business. Not only is a sole proprietor required to take care of her existing clients, she must also find time to focus on marketing, promotion and sales if she wants to generate new business. Finding new customers or selling more product or services to existing clients can take time to build up.
Solution: Set aside three to four hours a day four days each week to generate new business. This may seem like a lot of time, but the future of your business depends on it. Ask your current clients for referrals and keep a log of the people who have been referred to you. In this log keep a record of your correspondence and phone calls so you can tell at a glance whether you have followed up with these referrals. Remember, your clients already like you and your product or service and have recommended that you contact their friends or colleagues. Their recommendation will go a long way to generating new business.
Problem No. 2. Spreading time across multiple projects or roles. Sole proprietors are notorious for spreading themselves too thin. Most small business owners take on too much of the administrative work and feel overwhelmed by all the details of making an office run smoothly.
Solution: Hire someone else to do tedious small stuff that doesn’t require your full attention, such as opening the mail, processing invoices, making out the bank deposits, and filing paperwork. If you are not a trained bookkeeper or accountant, hire someone else to do that job. If you are still cleaning your house yourself, hire a housekeeper for at least a couple of hours a week. Spend 60 percent of your time marketing and promoting your business and 40 percent of your time working for your client. Everything else can most likely be done by someone else for a lot less than your hourly wage.
Problem No. 3. Limited resources. Everything costs money. And when you are your own boss, the money you spend on equipment, overhead, travel, entertainment, professional fees and other expenses comes straight out of your bottom line. The paycheck you take home becomes smaller and smaller.
Solution: If possible, share office space, office staff, office equipment and other services with other sole proprietors in the same boat as you. Think of the money you can save by covering only half the rent or half the lease. If you are a morning person, you may be able to work from early morning to late afternoon and then sub-let your office space to another sole proprietor who is a night owl and who likes to work from late afternoon to midnight.
Problem No. 4. Running the business more efficiently. As a sole proprietor, you have no boss looking over your shoulder; no supervisor to keep track of your efficiency. It’s both a blessing and a curse.
Solution: Learn to analyze how you use your time by keeping a log hour by hour throughout the work day. It is not enough to do things right. It’s also important to do the right thing, hour by hour. Ask yourself, “What is the highest and best use of my time?” If a person less skilled than you can perform the job for less pay than you require, then hire that person. Your job is to market and promote your business and to provide the product or service.
Problem No. 5. Not having enough time to focus on their own passions. Sole proprietors often feel overwhelmed by their businesses with little time left over to devote to family and social life, much less their secret passions.
Solution: In order to make time for activities you feel passionate about, it is going to be necessary to clear your calendar. Take a good hard look at the log where you keep track of how you spend your time during the work day. Hiring some part time office help could free up a couple of hours so you can slip out to an executive golf course and play nine holes some afternoon. Regardless of whether your passion is golf, skydiving, hiking, antique hunting, or reading romance novels, setting aside a few hours each month to pursue it will rejuvenate you. Put it on your calendar and make sure you fit it in!
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