Small Business Best Practice
Talk to anybody who has known me for a while, they will probably recognise two facts about my life and general outlook. The first is that I'm continually seeking to make connections and analogies between different subjects to help explain and understand the world around me. The second is that one of my favourite (very middle-aged) hobbies is to grow fruit and vegetables.
Hence why this post is about growing strawberries!
June is the prime strawberry month in the UK, and my little 20 square foot patch is generating a stupidly large crop; more strawberries than any family could reasonably eat, with more ripening every day. Having far too many strawberries is an enviable problem to have, but it also makes you wonder how you got to this point, and what to do with them all.
And this is where the analogy to running a small business begins. You see, small business owners who have been going for a while often reach a similar point in their growth; things start to click into place and income starts to grow. Having surplus revenue is a great problem to have, but how do you manage it?
It often helps to reflect on how you arrived at this outcome, and whether there are any lessons for those who are still on their journey to this point.
Strawberries are amazing at colonising a patch of ground. After fruiting, they send out little runners which - when they touch the ground - grow roots and start a new plant. So without much effort, a patch (and therefore harvest) will grow exponentially over time, thanks to all of these little growth "projects" that add up.
The same is true of small businesses. The simple fact is that organically growing a business takes time - years in fact. It's about experimenting, tending to your crops, putting out those runners and adding those little "projects" that over time give you greater and greater returns as each year progresses. It's not like the image of start-ups portrayed by Hollywood - there are long stretches of hard work and investment, where the payoff is uncertain or unclear.
There are a lot of people of course who think you can take a short-cut. They believe that small businesses can only start with £x million in external funding, a flashy office and a large sales team. It's the gardening equivalent of dumping massive amounts of fertilizer and leasing a shop ready to sell an expected massive harvest. It might work, but it might not too.
One of the interesting traits I consistently see in gardeners is that they instinctively understand that failure is common and indeed expected. You sow more seeds than you expect to grow, and then you expect slugs to eat some of those. There are years when an entire crop can be wiped out by some freak weather event or something out of your control, and you simply have to shrug your shoulders and try again next year - you never give up. Anticipated failure is something that I think all business owners (and gardeners) should build into their models.
Gardeners also understand that harvests come and go. Strawberries are abundant right now, but the season will be over by July and so planning for the future is needed. The business equivalent - of course - is to use any surplus income to plan for future times when cash flow may not be as easy to come by. This is not the time to give yourself a big pay-rise or loosen the purse strings; it is a time to do all of those boring things like repaying loans, finding good interest-bearing savings accounts or starting new projects that build more income in the future.
The final question to ask yourself is probably the hardest and most honest of all. Is this bumper crop because I've suddenly cracked the code of strawberry growing, or was it just down to sheer luck? My favourite advice from Eric Ries' book The Lean Start-Up is to "nail it then scale it" (emphasis added). It's tempting to use revenue as a test for whether you have "nailed it", but this may be a false indicator. Sales and marketing burn cash quickly, so before you hit the accelerator it's so important to take an honest look at your business and target market, double-checking that the conditions which gave your recent growth are genuinely repeatable and scalable. If they are, then start to scale. If they are not, then carry on iterating before trying to grow.
We often hear the proverb that "when life gives you lemons, make lemonade", but we never tend to think of the opposite situation. So today, my advice is this - when life gives you strawberries... it's time to make jam.