From Sole Trader to Small Business

ian-schneider-66374-unsplash

Setting up on your own is a great way to create a unique business where you have total control. Being a sole trader means that you can do anything you want with your business but it also means that, ultimately, everything that happens comes down to you.

Making the move from sole trader to small business is a great step for your business but you should think carefully about how you proceed. For example, you should consider whether you want to form a partnership or a corporation – a difference explained well this blog from the University of Alabama.

Finding a Business Partner

When you are setting up a small business, it is worth considering a business partnership. Working together with someone on an equal footing will give you a chance to get the support you need, sharing the responsibilities of running a business. However, finding the right person for the job is really important.

It’s a good idea to work with someone you already know who has talents that complement your own. Though you might not like the idea of working with a family member or friend, having a personal relationship can be a good foundation for a business partnership. However, you could always ask around – you would be surprised by how well a little networking can go and who you might meet along the way.

When you are deciding who to partner, you should talk about your personal goals as well as your goals for the business. It’s important that you both understand the other person to avoid misunderstanding later on. For example, one partner might be looking to build a business to sell while the other wants to grow it themselves. Getting this out in the open before you start signing documents is vital.  

Hiring Employees

Hiring your first employee is a good way to expand your team but it is also an expensive decision. You need to do the math before you even consider writing a job spec to make sure that you have the funds available to give a reasonable salary. With this in mind, you should consider hiring someone for their potential rather than their experience. Allowing someone to develop on the job is the best way to get cheaper labor but it is also a good way to attract talent.

Building up a team is a long process but you should always keep one thing in mind: a diverse team of people is always smarter and the most creative. When you are building your team, do consider how each person will fit in. How will their skills and experience complement the others? What can their personality bring to the table in meetings? You need to work together almost like a family while you are still growing the business so everyone has to have a place and be able to get along well.

Setting New Business Goals

As a sole trader, you probably have a few business goals in mind but nothing too concrete. But as a small business, it’s important that everyone knows what they are aiming for, how they are going to achieve it and why it is important.

One huge misconception when setting business goals is that busyness is the most important thing. Actually, it’s probably a sign that you aren’t working efficiently enough. With this in mind, one of your business goals should always be to work as efficiently as possible.

It’s very easy to get lost in a long list of business goals that waffle on. A better solution might be to pick a single word to describe where you want to go. This might be something like ‘loyalty’ or ‘branding’ but it could be something more abstract if you wish. Taking just one word is a good way to bring all your different ambitions together. For example, the word loyalty might be about developing a marketing strategy to encourage return customers but it might also be about fostering a great spirit among your staff and retaining them for as long as possible.

The clearer your business goals are, the easier they will be to follow. Assigning clear roles to fulfill processes and managing teams will help to clarify how things will move forwards but don’t be afraid to take suggestions and deviate slightly if you think it might help your business move forward. Having a plan is great but knowing when to change your mind is just as important.

As your small business grows, take a moment to look back at what you have achieved and what you still want to do. The transition from sole trader to small business might be tough but it is an amazing journey to take.

Facebook
Twitter
LinkedIn
Pinterest