Every small business has major turning points: Moments where one or two key decisions were made that set the business on a path to success. But when you’re just starting out, it can be hard to determine which choices will make or break you.
That’s why we asked successful small-business owners to look back on their humble beginnings and share some of the best business decisions they ever made. Of course, every business is different, but some of their success stories may help inspire you or guide your decision making process.
Finding a Focus and Using Tech to Streamline Business
Brad Friesen, managing partner at Starshot, a marketing agency specializing in event marketing for tech companies, believes no decision he made was more important than choosing a focus for his business. It did take a few years to make that decision, when he was in what he calls “paycheck survival mode.” “We were highly hesitant to focus, because when you are in that stage, you are taking on every piece of business that will pay a bill,” says Friesen.
Paying the bills, however, isn’t stability. He realized for his company to comfortably succeed, it needed to specialize. “In a highly competitive market, you need to be known for something,” he says. The decision was made to narrow the agency’s focus to cater predominantly to tech companies.
“That was a catalyst for allowing us to win business, because our message could be consistent,” he says. It’s a lesson he encourages other small-business owners to follow. “The more that you focus, the more the ability to own a category, and all of the other subcategories that come along with it, will keep that revenue flowing.”
The second-best business decision Friesen says he made was to use technology to streamline and quantify his business. Using a customer relationship management (CRM) platform, Starshot started tracking most aspects of its business—customer activity, marketing campaigns, finances and more—to enable more educated, data-driven choices. “Understanding your operations and input costs is absolutely critical,” Friesen says. “Using technology to do that over time, so that your decisions are based not just upon opinion, but real data, is a huge differentiator for any business and getting ahead.” It was, and remains, a major part of his business.
Adapting Business Models and Taking Big (Risky, Expensive) Chances
Sophie Kallinis LaMontagne, co-founder of Georgetown Cupcake and star of the TLC network show, “DC Cupcakes,” made her best business decision the day her first store opened. Georgetown Cupcake began with a specific business model set in place: become a boutique bakery, specializing in filling orders for special events, not focusing on in-store sales. “Our business model went out the window the very first day we opened,” says LaMontagne. “Customers lined up and wanted their cupcakes then and there on a walk-in basis.”
The company could have stuck to its business plan, especially considering it had only just started, but LaMontagne felt that would have been a mistake. “I think a lot of businesses get tripped up by an aversion to be being flexible.” Georgetown Cupcake’s business model was completely reinvented to be walk-in driven, and that decision is what LaMontagne credits with making the company the success it is now, with store locations all over the United States.
The second-best business decision the co-founder ever made was also inspired by its customers (“Always listen to your customers, because your customers will tell you what you need to know,” she stresses). The company frequently would get requests to ship its cupcakes all over the nation, but for the first the two years stores only delivered locally. That changed when LaMontagne become aware customers were starting to ship cupcakes themselves, frequently resulting in the delicious baked goods arriving destroyed. “We realized, either we figure a way to do this, make the investment and do it properly, or people are going to continue to ship our products on their own, and it’s going to damage our brand and business reputation when our cupcakes arrive and they’re all smashed up,” she says.
Setting up the massive infrastructure required for nationwide shipping of baked goods was a daunting (as well as expensive and risky) decision to make. But, as LaMontagne says, “Sometimes you have to take big chances.” Georgetown Cupcakes’ big chance paid off: Shipping is now the fastest growing part of their business.
Delegating and Locked Pricing
Chris Hathaway is the founder of AggData, a business-to-business firm specializing in store location data. His company began as a one-man show, and once it started to grow, Hathaway often found himself fighting the urge to remain hands-on. That’s why he says the best business decision he ever made was finally getting serious about startup leadership and began delegating.
“When I had somebody else start doing something, then all of a sudden, 30 percent of my time was now open to explore other parts of the business,” he says. “It started then to give me a gauge of my role as the owner of this company. To have the time to sit and think and understand the direction and vision we need to have as a group.”
The time he gained to think about the future of his company led to another decision that turned out to be a game-changer. In the early days of AggData, sold its data lists individually, but as their library expanded, demand grew for a subscription service (called AggData Premium) that would grant someone access to all the company’s information: “The decision that I made at that very beginning was in terms of the way that we priced that subscription,” he says. “Specifically, we decided to lock in the subscription rate for any subscribes to that premium service.” Anyone signing up for the premium service gets a locked-in starting price.
The decision to grandfather rates, especially when you’re starting out, sounds like it would endanger revenue and growth, says the opposite is true. “Those early clients became our biggest advocates. The amount of referral business we got from those early people, more than makes up for any increase in price that we would have put on them over the years,” says Hathaway. “Really valuing and respecting those early clients has paid off tremendously in the long run.”
Tell Us: What’s the best decision you’ve ever made for your business?
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