Brian Abrams’ staffing consultancy should have struggled during the pandemic, with millions of employees dropping out of the workforce during the Great Resignation and some employers going out of business.
Abrams, 46, helps his clients find the right people for their projects at PMO Partners, the IT project-management consulting firm he founded in Groton, Massachusetts in 2014.
But his business actually thrived. “2021 was a banner year for PMO Partners,” he says. “2022 is going to be better.”
Along the way, Abrams has grown what was once a million-dollar, one-person business to a team of three employees and 10 contractors.
Abrams is part of a trend that’s gathered rocket fuel in recent years—the growth of tiny businesses that make big money. It is easier than ever before for regular people to launch a successful business with a very small team of traditional employees, contractors, or a hybrid team of both.
Brian Abrams networked his way to new clients to replace business lost during the pandemic.
Thanks to a never-ending stream of free and inexpensive online tools, outsourced services, new digital payment options, the growth of freelance hubs, the ease of marketing on social media, the growth of online education via courses and masterclasses, and greater acceptance of remote work, small businesses are more efficient than in the past while needing less startup capital.
Many Americans are jumping on the opportunity to make the most of these trends. From January through November, there were nearly 5 million new businesses launched, up 55% from the same months in 2019, according to Census data.
What some of these new founders may not fully realize is how much money there is to be made in the average tiny business. Consider this: Among the 5.3 million businesses with one to 20 employees, the average one had only four employees and annual revenue of $816,180, with a payroll of $162,755, according to U.S. Census Bureau statistics for 2017. (Payroll is the highest cost in many businesses, followed by real estate costs.) That leaves $654,425 to cover any remaining overhead and take as profit.
Many small businesses bring in much more. If you look at the average revenue for firms with five to nine employees, for instance, it’s $1.2 million, with 6.5 employees on average and a payroll of $252,033. That leaves about $950,000 to cover costs or take as profit.
Some of the categories with the highest revenue and profit potential include high-end professional services businesses like Abrams’, as well as construction and real estate, e-commerce, financial services, manufacturing, wholesaling and transportation, based on my analysis of Census data.
But for most people who start a small business, it’s not really about the money once they’ve covered household expenses. It’s about the freedom and autonomy. Especially since the pandemic, people want to control when and where they work. Few jobs offer the same freedom to do that as a small business so, like Abrams they prefer to pave their own path to autonomy.
That said, starting a business is different from building it to six of seven figures in revenue and beyond, over a period of years.
So how did Abrams position his business for success during one of the most challenging times in recent economic history? Here are his strategies, which apply to many industries.
Start from a strong foundation. If you’re beyond the stage where you can move back in with your folks if you go broke, you’ve got to manage your finances carefully before you start your business. For many future entrepreneurs, launching a “side hustle” while working at a day job is best way to do this.
Sometimes, that can mean working very long days for a year or two. But it isn’t permanent. Abrams, a married father of two, could not quit working when he felt the desire to start his own business, so he spent some time planning how he’d exit from a stressful job at a Boston-based staffing firm. When he finally quit, he did short-term consulting work before starting PMO Partners in August 2014 to keep bringing in money while saving commuting time he could redirect to the business. “It was a good way for me to keep making money while I was planning,” he says.
When his last consulting job ended, he went full time with PMO Partners. He and his wife used her salary to pay the household bills as he got the business up and running. They’d already saved $5,000 to cover his startup costs, like building a website, getting incorporated, and putting the right legal documents in place.
Devote time to planning. Abrams worked on planning his company in the evening and on weekends for a year so he could hit the ground running. He decided to focus on placing IT project managers because he knew other staffing firms were not paying much attention to this space—meaning it would be easier to own his niche. As he realized, the transition to running a small business is bridge to carving out a new way of working, and living, that will be much more rewarding on every front than the average position. You may be surprised by how much energy you have when it comes to building something you love—for yourself and your loved ones—instead of going to a job you feel lukewarm about. Abrams’s decision to focus on project-management professionals helped him get to $760,000 in revenue by the end of 2015 and $1.5 million in annual revenue by 2016.
Hand it off. From the beginning, Abrams resisted the temptation to do everything himself and brought in professionals to tackle assignments outside of his area of expertise. Instead of using DIY marketing, he retained an outside marketing firm that does most of his marketing and social media.
Just as he approached $1 million for the first time, Abrams saw he needed a director of operations to handle back-office work, such as financial documents and candidate paperwork, and made his first hire. With his operations chief handling tasks that were bogging him down, he found, growth started to take off.
Stay active in your industry. Abrams views networking as a mandatory part of his business development and makes time for doing it consistently. He attends industry events such as user groups for project managers, holds a monthly webinar on a subject relevant to project-management pros, and often posts on LinkedIn on hot topics in his field.
Staying connected to his network has helped him pivot during the pandemic when some of the industries he served cut back on staffing to those in need of help. For instance, he took on a couple of food-manufacturing clients and one that specialized in developing online college courses for colleges and universities. “We stayed busy,” he says. “We got lucky in connecting with organizations that had an uptick in business.”
He also participates in a formal recruiting network made up of a couple of thousand recruiters. They help each other find good candidates and make placements in their areas of expertise—which helped his firm thrive during COVID. “If I’m successful in placing these candidates, I get half the fee,” he says.
Recognize how much there is to learn. To continue expanding his knowledge as an entrepreneur, Abrams has started building his board of advisors. “These were people I knew and trusted who could advise me on things I was stuck on,” he says. As he’s discovered, the more he grows his business, the more there is to learn.
Think long-term. Abrams wants the relationships he forms in his business to last a lifetime and stays in touch with candidates he’s placed as they move from job to job. “One of the things that makes me proud is that some of these candidates I’ve known for years, and years always think of me when they’re becoming available again,” he says. “Earlier this year I placed a consultant I’ve known for ten years. I never had a chance to place him before, due to timing. I finally placed him.”
All of this takes continuous effort and an ongoing commitment to reinvest in the business, but to Abrams, that’s a small price to pay. He’s built a career where he can work on his own terms, doing what he loves and excels at. As the poet David Whyte says, “The antidote to exhaustion is wholeheartedness.”
Source by www.forbes.com