Why it’s so important to be both strategic and flexible when running a new business
Editor’s note: In this series, Next Avenue follows Patricia Wynn as she ventures into entrepreneurship with her lifestyle assistant business in North Carolina. Future installments will note her progress, with advice for her and other midlife entrepreneurs.
Let’s face it. No matter how well thought out an entrepreneur’s business plan is, in the first 12-24 months of a new business, things will happen that are different from what was expected.
Startup owners need to be able to pivot or change their business in order to survive changes in the market or their customer base. Most importantly, entrepreneurs of small and medium start-ups need to be strategic when changing their plans, so they can use their limited resources to their best advantage.
“Entrepreneurs don’t want to spend time on something if it isn’t bringing in business.”
Regarding the services a company provides to its customers, Kimberly A. Eddleston, Schulze Professor Emeritus of Entrepreneurship at Northeastern University’s D’Amore-McKim School of Business in Boston, says, “If something doesn’t doesn’t make you money, but you what makes you money, so you keep it.”
Eddleston, who is also editor-in-chief of EIX, the Entrepreneur and Innovation Exchange, which is a backer of Next Avenue, says, “Entrepreneurs don’t want to spend time on something if it doesn’t pay off.” ‘business. They have to make strategic decisions about what will get people in the door.”
Adapt to different demographics
These strategic decisions cover not only what services a business can offer, but also who it considers to be its primary customer base. When Patricia Wynn, owner of Patricia Services, LLC, in Hillsborough, North Carolina, launched her lifestyle assistant business in April 2021, she thought her customer base would be primarily clients over the age of 65.
Over the past year, she’s seen her clientele grow to include Gen Xers and even a busy mom and PhD candidate with young children who needed help cooking for her family while she was working on his thesis.
“Originally, on my website, it seemed like I was targeting older people more,” Wynn says. “Now I want to reach everyone who needs help with their daily activities”, regardless of age.
Expanding its target market has been successful, but not without challenges. One difficulty has been to add one or two staff members, even part-time. “The hiring part was harder than expected,” says Wynn. “There is a labor shortage all over the country. People are doing their own thing and don’t want to work for others, even part-time.”
“I also have to make sure I have enough hours with clients to suggest someone to work with me,” she adds.
Being flexible also means growing a startup incrementally, notes David Deeds, Schulze Professor of Entrepreneurship at the University of St. Thomas Opus College of Business in Minneapolis and editor of EIX.
Tips for growing slowly
“When starting a business, buy only what you need,” he advises. “If possible, when it comes to equipment and other items, buy something that’s used or second-hand and cheaper. Don’t get a desk until you need it. That’s the difference between slowly build a business and be able to succeed and have a big ego and do too much too soon and fail.”
Strategic decision-making has been critical for Wynn as it maneuvers its start-up business around the pandemic, inflation and rising gas prices over the past year.
“I take it one day at a time,” she says. “You have to do what you have to do to feed yourself and pay your bills. If you see something isn’t working, you have to let it go. You may have to do it differently.”
Respond to new circumstances
As things change, entrepreneurs shouldn’t be afraid to update their business plans. Rather than updating once a year, many updates can occur on a monthly, weekly, or even daily basis. Startups don’t operate in a vacuum, they operate in the real world where constant change is happening.
According to a recent article on Entrepreneur.com, leaders of successful businesses must spend time developing effective strategic plans to determine where they want the business to go and how best to allocate their resources to get there.
While many factors go into crafting a differentiated strategy for a new business, one of the most important, according to the article, is deciding on a target market and finding the best way to reach it. achieve effectively.
To that end, now that she’s been in business for over a year, Wynn is reconsidering how she advertises her business, estimating prices and considering expanding so she can add a staff member or two. .
“This month I’ve come to the conclusion that I’m going to make some changes to what I do,” Wynn said. “In terms of reaching new customers, since the Care.com website only generates a few referrals, I will be printing flyers by the end of August or early September and distributing them in parts of Hillsborough and Chapel Hill where I haven’t advertised before because some people still don’t buy services online.”
Going forward, Wynn says it will change its pricing structure. For new clients, rather than setting hourly prices for cleaning, cooking or errands, she “will assess the tasks I’m being asked to do and the size of the house, and take into account the gasoline I need to drive there, before I give a price estimate for each specific house.”
“I have worked hard to develop good relationships with my clients over the past year, and I need to maintain them.”
She’s found that local cleaning companies charge more than she does for the same work, and for some clients there’s also an element of caregiving, whether she’s supervising young people or helping an older client.
“I’m changing the prices to make them fairer for the time and energy I spend,” says Wynn, who will maintain an hourly rate for existing customers.
Think two steps ahead
She also wants to add commercial customers such as banks, office buildings, and car dealerships to her customer list. This would increase his cash flow and allow him to hire people in addition to his brother, who periodically cleans a client’s properties with Airbnb rentals.
The challenge, Wynn says, has been blocking out time to sit down to figure out the next steps for her business while maintaining a 40- to 45-hour work week, which alternates between five and six days.
“It’s hard when you’re all alone,” she says. “A client of mine…moved to Boston, so I now have Monday and Wednesday nights free to look on the computer and research what I need to do to get ahead, make more profit, and add customers and staff. One way to attract more staff is to fill out job vacancies through the local labor department. I used to post job vacancies there when I was manager at McDonald’s and Wendy’s.
Carefully check job seekers
Wynn says she can also post a job posting for her company on Facebook, making it clear that background checks will be done on anyone who applies.
When she replaces the client who moved to Massachusetts, Wynn will hire someone to work with her. The application process will include a practical component.
“Part of the interview will be watching me for a few hours, so they can see what I’m doing for a client,” Wynn explains. “If they can handle the job and if the existing client likes them, then the next week I’ll send them on their own, while I serve another client.”
Wynn says adding just one staff member requires her to ensure that her existing clients can develop a good relationship with someone other than her. “I’ve worked hard to develop good relationships with my clients over the past year, and I need to maintain them,” she says.