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💡 Business Tip - Build on a Solid Foundation (Issue #12)
Don't try to expand too quickly
“When I started Wise Acre Frozen Treats, no other company was making organic popsicles from unrefined sweeteners. Working out of a schoolhouse kitchen in March 2006, I developed my recipes using honey and maple syrup. A year and a half in, I brought on my first employee, and then it really took off from there. By 2008, we had 15 employees, a 3,000-square-foot manufacturing facility, and distribution to all of the natural foods stores and many major supermarket chains on the East Coast… By the end of the year, we'd gone bankrupt and I was unemployed.”
— Jim Picariello, CEO, Wise Acre Frozen Treats (source)
It’s agonizing to watch your business — the one you’ve put your heart and soul into — collapse and fail. But that’s the risk you take when you try to expand too quickly.
Strengthen your business foundation before attempting to build your future upon it. Don’t expand until you have a solid model up and running with high demand and repeat business from happy customers.
Even then, you should test and monitor your growth constantly. This is especially true as a solopreneur. We don’t have the massive amounts of capital that larger companies do, which help them coast through rough times.
If we make big mistakes, our business can die overnight.
I know adding new product lines and services is tempting when things are going well. Building a business is exciting! When your customer base is growing and money is flowing in, you want more and you want it now.
However, try to remember why you’re building your business. It’s different for us than some corporation that must keep investors happy, grow at all costs, seize market share, boost the stock price, or make things look good for an acquisition.
We're often working in our businesses for the rest of our lives (or until full retirement). We may even want to leave our business to our children. Slow and reliable growth helps ensure this outcome.
When your business is fairly new, you need to:
Focus on a niche customer (tighter is better).
Focus on a specific need (solve one big problem).
Focus on one product or service (tune it and make it great).
Resist the urge to scale your business and build more until your core is rock solid and thriving.
Later, happy customers will tell you what they need next. They’ll ask for more.
Heck, even people who turn you down will tell you why if you ask them. It will provide insights into the demand you're not filling.
You'll know the demand is real if you hear the requests often enough. Then you’ll have to decide if you want to expand your business that way. You also determine when the timing is right.
Slow and steady wins this race!
Larry Cornett is a Personal Coach who can help you optimize your career, life, and business. If you’re interested in starting a business or side hustle someday (or accelerating an existing one), check out his “Employee to Solopreneur” workshop (coming soon).
Larry lives in Northern California near Lake Tahoe with his wife and a gigantic Great Dane. He does his best to share advice to help others take complete control of their work and life. He’s also on Mastodon.