Yolanda Nichole Solutions
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05/02/2024
Industry data shows small businesses employ almost 50% of the U.S. workforce, but over 80% of small businesses only have one employee - the owner. Most companies with one owner/employee earn around $44k - $46k per year (s/n: businesses owned by Black women earn an average of $24k per year). However, when additional employees are added to these companies, earnings skyrocket to six figures and beyond. It’s difficult to hire employees with little earnings or financial backing. It’s very challenging for these businesses to be approved for enough funding from banks and investors, even more so for Black owned companies, to gain the ability to hire more employees and grow the business.
A proven way to build capacity in a small business is with strategic partnerships. These partnerships may look like formal joint ventures with other companies to increase market access, hiring independent contractors and other vendors to increase company infrastructure, or simply collaborating with other companies on large contracts for a host of mutually beneficial reasons. Partnering creates more opportunities for small businesses to afford additional employees, grow revenue, and serve more customers. Proper due diligence & setting clear communication and expectations are important factors for making partnerships work and reducing associated risks.
Today for , I encourage small businesses to support each other with these five steps:
- Develop a plan for how strategic partnerships can be useful for your business and create a solid pitch to engage the right partners
- Identify complementary small businesses as potential strategic partners
- Connect small business owners who may collaborate well together
- Prioritize procurement from other small businesses for business and personal needs
- Refer small businesses to opportunities when you can’t do it anyway, it strengthens their credibility, it propels a common mission, you receive a referral fee or other incentive, and/or you have an abundance mindset
1 in 5 businesses are expected to fail after five years, commonly from lack of capital or market demand. Given my line of business, I would argue the risk of failure can be mitigated with a serious written plan of action for what needs to be accomplished (goals) and how (strategies including contingency planning).
Having a business plan to lay out the basic structure of how the company will operate and a strategic plan to have a roadmap and timeline for accomplishing goals on a quarterly basis could provide just the edge to be an attractive option in the market that customers would be delighted to engage in. This planning can take time away from pursuing “revenue generating activities” - to actually sit down, think things through, and write out a plan - but it can save a load of future time, effort, and energy to not have to reconsider how to accomplish a task each week. Having a trusted thought partner to assist may save even more time and serve as a muse for go-to-market and other growth ideas. The business plan itself could be used to pursue more capital and share how resources would be managed.
In other words, 4 in 5 businesses are expected to succeed after five years. Nearly two thirds of all new jobs created over the last 25 years have been from small businesses. These companies are vital for our economy and well-being. Having plans and roadmaps assists with their survival during these crucial times.
Today, I encourage people to support :
- Shop at a new small business - maybe grab dinner at a great restaurant
- Share positive and constructive feedback with your favorite small business owner in support of growth
- Connect with small business owners and listen for how they can benefit from either your expertise and products, or others you know they should connect with
- For small business owners: review and develop your business and strategic plans to help this quarter of 2024 exceed current expectations [let me know if you need help with that]
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