After 30 years of running businesses, Gary Short shares what he’s learned from experience.
Gary Short founded sys-tek in 1995. When he started the company, Short focused on delivering engineering design for mission critical, pharmaceutical, higher education and life sciences projects. But over the years, he saw opportunities to change direction in order to grow the company.
Those markets continue to be a focus for sys-tek, but at the same time, Short and his son Travis have been carving out a niche in technical commissioning combined with testing, adjusting and balancing. Combining their strong engineering background with a solid knowledge of control system operation, construction and start-up services has allowed them to grow the company and also provide their clients with more complete solutions.
The growth has resulted in sys-tek opening a second office in Houston, Texas.
Along the way, like most entrepreneurs, Short has encountered a number of challenges—and also learned several lessons.
“After 22 years of owning my own business and eight prior years in a partnership, I have discovered that there are several lessons that every small business owner should learn early in their journey,” he said.
Here are Short’s Top 5 lessons for running a small business:
Lesson 5 // Build your company to replace you. Many entrepreneurs start a business with a great idea, a specific skill set and know how. I believe you should immediately hire that skill set to replace yourself. This is what allows you freedom! Freedom to learn and develop the other skills needed to run your own business.
Lesson 4 // As an entrepreneur, it is easy to chase the next “shiny coin.” However, you and your company should stay focused on your main skill set, or the entire company will pay the price. Ultimately, many of those shiny coins are made of wood.
Lesson 3 // Diversify! Never let any one client represent more than 30 percent of your business, even if you must say “NO.” Growing a business by increasing staff for a large client is a double-edged sword. The only safe way to increase sales with a major client is to increase sales with other clients by 70 percent or more; otherwise, you will become dependent. The risk is that at a moment’s notice that large corporation can change personnel. If your contact moves on or retires, you could lose that business very quickly without much notice. There is zero freedom if your customer base is not diversified.
Lesson 2 // Verify recommendations from your accountant and legal attorney. Playing the loophole game with the IRS is like playing with dynamite. The IRS will get what they think is owed, and when the chips are down, the original accountant and attorney are long gone. Have two accountants and two attorneys and get two answers.
Lesson 1 // Never run out of cash. Your balance sheet and P&L can look great, but if you are out of cash and specifically cannot make payroll, you are out of business. The account receivables you show your banker and your P&L prove you can operate at a profit, but without cash, the balance sheet and P&L just become pieces of paper. Cash is king.