Many entrepreneurs are distracted by the belief that they can come up with an idea, ramp up sales and exit in a few years with gazillions of dollars to start something else. Although this idea is popularized in the media, there is another way to build a healthy, thriving business—but it takes a longer view. Part of that view requires an entrepreneur to make some 10-year decisions.
Many of the small businesses you and I likely identify with, outside the startup community, aren’t sexy up-and-coming tech companies. They are more like the dry cleaners, small restaurants, and other merchants in communities all across the country. These are the businesses that fix our cars, do our laundry or help us relax with friends over dinner or drinks on a Friday night. When they make decisions, they know they’re making decisions they’ll likely need to live with down the road—maybe even 10 years from now.
We can learn from these businesses.
I’m convinced there is a difference between making decisions you know you’ll have to live with (10-year decisions) and decisions that might produce short-term results that someone else will be married to in the future. Making 10-year decisions might even require taking a short step backward today in order to take three giant steps forward over the next year. It may also require a business leader to think beyond the next quarter or two and set longer-term objectives.
Of course, nobody understands the nature of your business like you do, so how you make decisions is ultimately up to you. What’s more, this doesn’t mean short-term (monthly or quarterly) objectives aren’t important. It just means those short-term initiatives need to be consistent and supportive to your longer-term goals. For example, depending upon the nature of your business, it’s possible to hurt long-term customer relationships by pressuring them to act now to meet month-end or quarter-end sales objectives. How you address a quarterly need to produce sales volume needs to be consistent with your long-term sales objectives.
This can be a complicated question. The answer would be different for a venture-backed tech company than the average small business we’ve been talking about. A better question for the latter might be, “How much does your business need to grow to stay competitive?” or “How much growth is so much it might dilute the quality of your product or act contrary to your business mission?”
I think most of us would agree that for most businesses, you either need to grow or atrophy. There aren’t many successful businesses able to indefinitely maintain the status quo. Managing growth, or at least the right kind of growth, is an important consideration for most small businesses—and requires some of those 10-year decisions if the goal is to create viability for the long term.
Most business founders want to build something of value that will last. And while there are notable success stories of meteoric growth popularized in the press, there are also companies with promise that just never met expectations because too many decisions were made without looking very far into the future.
Regardless of whether you intend to make your business your life’s work or plan on a big exit in a few years, making 10-year decisions will impact whether the company you’re building today will still be around 10, 20 or even 30 years from now.
Ty Kiisel is a contributing author focusing on small business financing at OnDeck, a technology company solving small business’s biggest challenge: access to capital. With over 25 years of experience in the trenches of small business, Ty shares personal experiences and valuable tips to help small business owners become more financially responsible. OnDeck can also be found on Facebook and Twitter.
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