Ask: Raynor

Working with hundreds of small businesses annually, our business advisors have fielded nearly every question imaginable about running a small business from getting started, to daily operations, to growing your biz, to what do you when you’re ready to close or sell.

We’re kicking off this series with Raynor Large, our director of business advising, long-distance runner and spreadsheet master.

Have a question you’d like to see us cover? Email us!

Name and role: Raynor Large, Director of Business Advising

Q: What’s the most common mistake you see small business owners make, and how can they avoid it?

A: Not accounting for their time! A service provider competing on price by giving their time away is an unsustainable model. When building the price of a new product or service as an entrepreneur, it’s so valuable to include the time it takes for creation as, at the minimum, the cost it would be to hire someone else to do it. This way, you can either pay yourself to create (yay!) or be in a good position to scale and grow by hiring others (…also yay!)

Q: How should small business owners approach work-life balance while growing their company?

A: I’ll let you know if I ever find a client who does it successfully! The best advice I can give is to track your time and focus on a few things:

1. When are you most creative? Engaged? Productive? …Useless? Identify the best times of day or days of the week to maximize your own internal ebb and flow – when should you be working on marketing? Producing? Taking a step back? Trying to do the wrong thing at the wrong time can make it take 2-3x longer.
2. I like the rule of 80/20 – 80% of your time should be spent in the business, and 20% on the business & growing it. Use your productivity patterns to figure out what that looks like – 1 day/week? 2 afternoons? An hour early every morning?
3. If you’re productive and know when you’re not able to be great at your business, then plan around it – and avoid burnout by planning ‘life’ as part of your task list!

Q: What’s one underutilized resource or tool that more small business owners should take advantage of?

A: Personally, I love www.coursera.org; it’s a great way to build in-depth knowledge in specific areas, on your own time. I’ve built my own knowledge around strategic financing, human resources, marketing, etc. by taking full, semester-long courses through universities; it’s free if you don’t need the credit and are just in it for the knowledge.

Q: How can small business owners identify and prioritize growth opportunities?

A: I use the CEI method – write down each of your ideas/projects and rate it 1-5 on the following three metrics:

1. CONFIDENCE – 1 being low confidence in the outcome, 5 being high confidence
2. EFFORT – 1 being high/lots of effort, 5 being low effort/easy
3. IMPACT – 1 being low impact on your business, 5 being high impact

Then, it’s simple comparison – which of your growth opportunities are you most confident in, with the least effort, and have the largest impact? Focus there first!

Q: What’s your advice for small business owners on building and maintaining a strong team?

A: Communicate, communicate, communicate! Teams are built on trust and understanding; the clearer you are in setting your expectations and creating accountability, the easier it is to manage and avoid negative emotions building up. Start with a good job description and use that to build SMART goals, even before you hire, for each role – and then give the employee the tools needed to do the job.

Q: How should small business owners approach fundraising or financing in the current economic climate?

A: Every investment has a cost (easy to predict), and an intended outcome (harder). Financing requires you to explain the latter to get the former. In a time of uncertainty, being conservative helps – under-promise, and over-deliver. My rule of thumb is that growth will always take twice the energy you expect and only result in half the outcome you hope for… but that’s why I’m an advisor, not an entrepreneur! Make sure your assumptions are justifiable and well thought-through before you go sit in front of a bank.

Bonus suggestion – when pitching an idea to a lender or an investor, I always recommend making a list of 5-10, and then order them from who you want to work with the most to who you want to work with the least. Then, start at the bottom! Practicing with a few low-stakes lenders lets you refine your communication, overcome some objections you didn’t anticipate, and get to a more polished presentation by the time you get to the lenders you’re excited about.

Q: What strategies would you recommend for small businesses to stay competitive against larger companies?

A: Know your value, and don’t apologize for it! Competing on price is almost always going to put you out of business, because you don’t have efficiencies of scale. Find your value proposition elsewhere, and lean into it. Customer service? Customization? An impromptu song when a customer project is finished? Of course your customers are willing to pay you more – just be confident in why they should.