In the course of my career over the past decade or so, I’ve started three businesses–with varying degrees of success. I thought it’d be interesting, and potentially helpful, to share what I’ve seen in the course of starting, operating, and exiting those businesses–each of which was very different from the others in important ways. I’ve talked with many founders whose business goals are a bit ambiguous, and who are making key decisions in one area that aren’t in alignment with their decisions in another (hat tip to an all-time favorite professor of mine, Noam Wasserman, and his book The Founder’s Dilemmas for some of the thinking here).
One useful way to think about some of those key decisions early on can be made clearer if you’ve decided whether what you’re building is a startup or a small business. Many people group those into the same category–and that’s fine, from a nomenclature standpoint. But there are some key decisions that you’ll make about your business that will determine if it’s more of a “startupâ€ in the traditional sense, or a “small businessâ€ in the traditional sense–and bringing those decisions into alignment can help you save time and heartache, and can affect the financial and career outcomes you achieve.
Although this process covers a number of steps, one of the key decisions you should consider as you start and run your business is how fast you can grow, and how fast you want to grow.
Think about what you want your business to look like in five years. Do you imagine a smoothly humming machine, kicking off enough cash for you to take a few nice vacations every year, giving you time to volunteer, engage with your community, and work every day to make it a little better? That’s what you’d normally think of as a “small business.â€ Profits are prioritized over hyper-growth, often leading to predictably positive net income after a few years of very hard work.
Tim Chaves is the founder & CEO at ZipBooks, a free accounting tool with built-in invoice financing, time tracking & payment processing.
BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.