While it may not be polite to use averages, around 60% of “businesses” in my area are home-based, single operators with no staff or commercial premises.
That is not to say they are not successful. It seems to be a trend. There is a theory that as jobs decline, small businesses increase. In a lot of cases, they make very good profits and, from the Owners’ point of view, are sustainable because costs and overheads can be easily managed.
The Government counts businesses which support between 1 and 5 persons as “Micro” businesses. Elsewhere I have seen them referred to as “solopreneurs”. They can consist of a person who has a business as a side job or a person who is full-time self-employed.
The biggest hurdles in this category of business seem to be Time and Leads.
Several other categories emerged from a survey of over 4,000 businesses (see below):
While the figures relate to the US experience, the same situation applies in this Country. As you go up the scale, the hurdles change – but you still have hurdles!
What I did find useful is the Start -Run- Scale idea. The view taken seems to be that the business side of things kicks in once you move to employing staff and moving up the Revenue scale.
Perhaps there may be some truth in the saying I heard: if you are still working by yourself in your business after 3 years, you have a job, not a business. That is usually a hard “business” to sell, too.
Coming back to the averages, we have found that 5% of Owners receive generous salaries and get paid business dividends. We have also found that these are the same Owners who work on their business, not in it.
The good money is made when the team runs the business and you focus on strategy and planning. A right strategy needs a clear plan, and the proper management and implementation of tasks across all areas of the business.
That’s what we do at Optimal Profit.