An Entrepreneur’s Guide to Creating & Maintaining a “Thin Business”

Every decade seems to come with it’s unique entrepreneurial developments. In the late 18th and early 19th centuries, for example, the industrial revolution moved hundreds of millions out of rural agriculture and into urban industry.  Concepts like “specialization of labor”, “mass production” and “distribution networks” revolutionized the global economy.  The “information age” which started in the early 1960’s and continues today, evaporates boarders and creates corporate entities that rival nations in the level of resources they control and scope of events they influence.

Over the last decade there has been a radical change in how businesses start, grow and scale.

In decades past a startup required an office, dedicated phone lines, secretaries and full time employees in order to be taken seriously.  Investors needed more than just a good idea and a prototype. They needed to see established, branded and dedicated infrastructure.

These days, many businesses that make millions of dollars in their first round of funding are running so lean the principals don’t even share a country let alone office. Any service that can be purchased from others at a lower rate is outsourced.  Even phone receptionists and secretaries for many businesses work in a different nation from the executives they support.  Business now exist in loose eco-systems.  Whereas, in years past, an advertising agency might employ graphic artists, they now routinely hire them by the hour. Manufacturers hire designers on a project by project basis. Fortune 500 software developers hire programming teams by the project rather than programmers they have to pay year round.

These two changes in business are not optional.

If you are starting, running or working to fund an enterprise, you need to ensure you are running as lean as possible and that you are networking efficiently to build the business relationships you need to survive.

To run lean:

• Make sure you understand the wide range of skilled labor services available through resources like Elance. When you hire someone, it must be because their skill set is truly unique or because the logistics of your business require it.
• Make sure you build new business relationships with customers, suppliers and strategic partners every week.  Tools like Linkedin and networking events like those hosted by School for Startups are critical to acquiring new business and reducing your costs.
• Develop and maintain business relationships with those for whom you have worked and those who have worked for you.  People move from company to company and project to project reforming operational groups almost continuously.  The more connections you have, the more opportunities you will have to generate revenue.
• Examine your business to see where your economic value lies and focus your time and industry on increasing that value and the revenue it generates.  If you are a website developer, do you need to own and operate your own servers? Or is that something you can outsource to Go Daddy.  If you run a dog walking service, does it make sense to hire someone to manage your marketing campaigns so you can spend more time performing the service for which you get paid?
• Bring new people into your business on a regular basis.  Interns and apprentices who benefit from mastering new skills with your help go on to work for other enterprises and to start their own businesses.  Helping the next generation of business leaders is one of the best ways to ensure you and your business a profitable future.

Understanding and accommodating the economy in which your business exists is critical to ensuring its survival. Generally speaking farmers who refused to mechanise lost their farms, industrialists who refused to computerize lost their factories.  In today’s economy, businesses that don’t run thin and who fail to create and maintain effective business networks find it very difficult to survive.