WHY STARTUP ADVICE IS KILLING YOUR SMALL BUSINESS
Let's start with a number: 99.95%. That is the percentage of businesses that will never see a single dollar of venture capital. Not because they failed. Not because they didn't hustle hard enough or find the right investor or nail their pitch deck. But because the overwhelming majority of businesses that exist in this world are simply not the kind of businesses that venture capital invests in.
And yet — and here's the part that genuinely makes me a little bit unhinged — virtually every business podcast, every bestselling entrepreneur book, every piece of content you've ever bookmarked is written for the other 0.05%.
That's not a gap. That's a scandal.
It's a scandal because it means that millions of small business owners are running their businesses using a playbook designed for an entirely different type of business — with entirely different goals, entirely different metrics, and an entirely different definition of success. And the consequences of following the wrong playbook are not abstract. They show up in your cash flow. In your margins. In the size of your salary. In the fact that you cannot take a two-week vacation without the whole thing catching fire.
I know this. Because I lived it.
I Ran a Small Business Like a Startup. Here's What It Cost Me.
Before I became a Fractional COO for small businesses, I was the founder and operator of a small, founder-led clothing company. We designed, cut, sewed, and retailed size-inclusive, sustainable clothing to women around the world. Directly. No middlemen. No fast fashion supply chains. Just us, our incredible team of eight people, and a genuine belief that we were building something that mattered.
And honestly? It was novel. It was innovative. It was one of the coolest things I've ever done.
It was also the hardest five years of my life.
Here's what I haven't always said out loud: I called it a startup. It was not a startup. And that distinction — that seemingly small, seemingly semantic, who-really-cares distinction — cost me everything.
Because I called it a startup, I treated it like one. I ignored profitability and told myself we'd sort the margins out later. I hired too fast and expanded before the revenue could hold it. I chased outside capital we weren't structured to receive. I took my eye off the slow, steady metrics that were actually telling me something important — monthly revenue, client retention, margin per unit, cash on hand. I swallowed girlboss hustle culture advice like it was gospel, because that's what startup founders did, and I was a startup founder, right?
Wrong.
I was the owner and operator of a small business. A real one. A good one. One that needed completely different systems, a completely different set of metrics, and a completely different kind of operational support than the startup world celebrates.
What I needed, urgently, was someone to sit me down and say: your small business is a mess, your margins are wrong and the way you're running this thing is not sustainable. I needed someone to look at the actual numbers and tell me the truth.
Nobody did that. And I ignored it at my own peril. I had to lay off my incredible team. Close up shop and call it a failure.
So What Actually Is a Startup — And What Isn't?
A startup is a specific type of business built around a specific goal: grow fast, dominate a market, and exit. That exit might be an acquisition. It might be an IPO. The point is, a startup isn't built to run forever — it's built to be sold. Or to burn through investor money trying.
Startups are also built around an idea that can plausibly capture a massive, scalable market. Not a great niche. Not a loyal customer base in a specific category. A massive market that can justify the kind of investor return that makes the venture capital model work. Think: software that scales to a million users without adding a million employees. Think: a platform that gets exponentially more valuable the more people use it.
And here's the detail that almost nobody explains clearly: startups are designed to be unprofitable. On purpose. That's not a bug — it's the entire model. A startup burns investor cash deliberately, racing to acquire market share before a competitor does, betting that dominance now equals profit later. That math only works if three things are true:
You have a genuinely novel product with the potential to dominate a massive market
You have investor capital to fund the losses while you wait
You have an exit strategy (selling, going public) that eventually returns that capital — with interest
Now ask yourself: does that describe your business?
For 99.95% of us, the answer is no. And that’s not a problem. That’s just clarity.
I’m thinking about a very specific kind of business here — and if you’re reading this, there’s a good chance you’re running one. The food tour operator who has built something beloved in their city and can’t figure out why they’re still not paying themselves properly. The wellness retreat founder who sells out every event but is drowning in logistics between them and wonders why she can’t take home a salary. The fitness studio owner whose team is wonderful but whose operations live entirely inside her head. The online coach or course creator with a full client roster and zero systems to support it. The cooking class, the immersive workshop — the experience-based business that has incredible demand and a back-end held together with duct tape and goodwill. These are B2C businesses. Direct-to-customer. The value you deliver is the experience itself — and the experience only stays excellent when the business running it is healthy. Every operational crack eventually shows up in the customer experience. Every time.
None of these businesses are startups (depsite the founders perhaps calling them as such). They are small businesses that need to be profitable, sustainable, and genuinely enjoyable to run — and they are being actively failed by advice written for a completely different kind of company.
A small business is built to sustain. To generate income. To support a team, a community, and — perhaps most critically — the actual life of the person who built it. A small business is not a stepping stone to something real. It is the real thing.
What the Wrong Playbook Actually Costs You
When a small business owner internalizes startup advice, here's what actually happens:
They hire before the revenue can hold it. Startups scale headcount aggressively because growth is the goal. Small businesses need lean, excellent, clearly-defined teams that grow with the revenue — not ahead of it.
They optimize for growth instead of margin. Startups are rewarded for market share. Small businesses live and die by their margins. Spending on growth before your unit economics are solid isn't bold. It's a slow bleed.
They don't pay themselves. Startup founders defer salary. This is normalized — even celebrated — in startup culture. In a small business, not paying yourself isn't grit. It's a pricing problem and a margin problem dressed up as virtue, and it leads to resentment, burnout, and ultimately, business failure.
They chase capital they're not structured to receive. Seeking equity investment for a business that can't deliver a 10x return doesn't make you ambitious. It makes you misaligned — and it burns enormous time and energy that could go toward making the business actually profitable.
They measure the wrong things. If you're tracking revenue growth but ignoring profit margin, owner salary, and cash flow, you can triple your topline and still be broke. I have seen this. I have lived this.
What Small Business Operations Actually Need
Here’s where I want to get specific. Because this is the part that nobody talks about — what running a healthy small business actually requires, operationally.
When I work with small business founders as a Fractional COO, the first thing I do isn’t launch a growth strategy. It isn’t hire a marketing agency. It isn’t find a new tool to plug into their stack.
I audit. I look at what’s actually happening across the whole business. And almost always, what I find is a business working too hard for too little return — not because the founder isn’t brilliant, not because the product isn’t good, but because the foundation is cracked.
I look at four areas. Every single time. Because every small business problem lives in one of them — or in the messy, expensive overlap between them.
1. Financial
This is always the first stop. The financials don’t lie, and they tell me everything — what you were worried about, when you were worried about it, and what you threw money at trying to fix it.
Revenue, tracked with precision. How much is coming in each month. What percentage is from new clients versus existing ones. Where the money actually comes from — and what it costs to earn it.
Margins on every transaction. Not just overall. Per product. Per service. Per client. If you’re making money on some things and losing it on others and you don’t know which is which, you’re not running a business — you’re running a guessing game.
Profitability. Full stop. Not eventually. Not at the next revenue milestone. Now. Or if not now, there is a clear, honest, time-bound plan to get there — not a vague hope that scale will fix it.
A real budget. Built before the money is spent, not reconstructed after. One the founder has actually seen and agreed to.
Cash flow, down to the detail. Not approximately. Down to the euro, the dollar, the pound — whatever currency you run your life in. Cash flow is the heartbeat of a small business. If you don’t know what it looks like thirty days from now, you’re flying blind.
2. Internal Operations
This is the how-we-actually-run-this-thing layer. Both how the business operates internally and how you deliver your product or service to customers. The stuff that lives in people’s heads instead of documents. The processes that work great when Sarah is in the office and fall apart the moment she takes a week off.
A documented, repeatable system for delivering your product or service. Not in your head. Not in a Slack thread from eight months ago. Somewhere findable, followable, and trainable. If your service delivery relies entirely on you knowing exactly what to do at every step, you don’t have a system — you have a dependency.
A system for new projects. Who owns what. What the milestones are. When things are due. Who makes the call when something goes sideways. New initiatives shouldn’t require a founder to run every kickoff meeting from scratch because there’s no shared infrastructure for how projects get done around here.
Tools that serve the team — not the other way around. A beautifully organized Notion workspace that nobody uses is not a system. A simple Google Sheet that everyone actually opens every day? That’s a system. Match the tool to the team, not the other way around. Tools for projects, communication, and documents. Keep it simple.
3. People
Every business problem is ultimately a people problem. The operations are only as good as the humans running them. And this is the layer most founders either over-invest in emotionally or systematically ignore.
Every team member knows exactly what they own. Not generally. Specifically. What they’re responsible for, what success looks like in their role, what they’re aiming toward. When everyone is kind of responsible for everything, no one is truly responsible for anything. I’ve watched this dynamic swallow whole businesses from the inside.
People are in the right roles. Not just “doing a good enough job.” Actually operating in their zone of genius, doing work that energizes them, delivering at the level the business needs. Small businesses can’t afford passengers. And they also can’t afford to burn out the people who are carrying everything.
The founder is not the bottleneck. If every decision, every approval, every piece of copy, every minor question lands in your inbox — that’s not leadership. That’s a structural problem. And it will keep you firmly inside the business, unable to see it clearly, until something breaks.
4. Marketing and Sales
This is how new clients and customers find you — and how you keep the ones you have. And for most small businesses, this is the area where startup advice does the most damage. Because startups spend on acquisition at all costs. Small businesses need a sustainable engine, not a cash-burning blitz.
Simple, effective marketing systems. A social media calendar that someone actually maintains. An email marketing strategy with a real cadence. A system for referrals. Content that builds trust over time rather than chasing every new platform. Nothing fancy — consistent. Consistent beats clever every single time.
A clear offer that actually converts. Before you spend a single dollar on ads or campaigns, your offer needs to be dialed. Spending on acquisition when your funnel leaks is one of the most expensive mistakes a small business can make. Fix the offer. Then amplify it.
Retention metrics, not just acquisition. In a small business, a client who stays for three years is worth ten times a client who churns after one project. Are you measuring that? Are you actively tending to those relationships? Acquisition gets the headlines. Retention pays the bills.
None of this is sexy. None of it will get you on a podcast. But these four areas — Financial, Internal Ops, People, and Marketing/Sales — are the entire foundation of a healthy small business. Get them right, and everything else gets easier. Leave them cracked, and no amount of growth, hustle, or outside capital will save you.
The reason so many small business owners don’t have this clarity isn’t because they’re bad at business. It’s because nobody ever told them these were the things that matter. Because the content they’ve been consuming was written for a different kind of company, chasing a different kind of goal.
This Is Why a Fractional COO Built for Small Business Changes Everything
You've probably heard the term. You might have assumed it was for companies bigger than yours. You'd be wrong.
A Fractional COO — the right one, one who actually understands small businesses and not startups — is not a luxury. For a founder-led business under $3M, it might be the single highest-leverage thing you can do.
Here's why. As a founder, you are too close. You are emotionally invested, financially exposed, and making decisions under pressure every single day. Objectivity is the first thing to go. (Ask me how I know.) You cannot see your own business clearly — not because you're not smart, but because nobody can see their own business clearly. That's not a personal failing. It's a structural issue.
A Fractional COO who truly gets small business operations comes in and does what you can't do for yourself: looks at your business with fresh eyes and tells you the truth. What's working. What's bleeding. What needs to change — and in what order.
Not a startup order. Not a growth-at-all-costs order. The right order for a small business that needs to be profitable, sustainable, and actually enjoyable to run.
This is what that actually looks like in practice:
Clarity on who owns what — so decisions stop bottlenecking at you
Financial visibility — margins, cash flow, and a real budget, dialed down to the detail
Systems that your team can actually run without you holding their hand
A stop to reactive hiring — no more throwing money at symptoms
A business that could survive two weeks without you — and eventually, a lot longer
Need proof?
At an online fitness studio, I identified $65K in annual spend we are simply not going to repeat — money that had been reactively thrown at problems instead of invested in solving the right ones. Combined with a host of other cuts, we've reduced their monthly budget by 35% and will shift their profit margin from a scant 11% to 45%. Which, for a purely online business with zero physical space and no inventory, is exactly where it should be.
For a retreat operator, we evaluated profitability on every single experience — identifying exactly which ones were worth running and which were a catastrophic cash suck. We calculated the true cost of operating the business and divided those costs across every retreat, making sure each one was carrying its full operational load. Now, as we plan the next year of experiences, we know precisely which ones are good for the business and which ones are a drain. We'll double topline revenue from $600K to $1.2M annually — but more importantly, we'll create profitability for the first time in the business's history, moving from breakeven to a $300K surplus. Not bad for year one of strategically looking at the numbers.
For a third client, we cleaned up internal ops, moved all communication to Slack, and installed a simple set of KPIs to measure business effectiveness. The team went from tracking 25 different indicators to just four. Profitability is up 17% year over year, the team is delivering, and there's a genuine sense of calm in the business — because people know exactly what they're responsible for and how to get there.
All of these are real examples inside real small businesses. Not startups. Not scale-ups. Small, experience-based businesses that got the right operational support — and changed fast.
What to Do Instead
1. Name what you are. And mean it. You own a small business. Say it. Write it on your About page. Tattoo it on your hand if that's what it takes. Because the moment you call it a startup, you start following startup rules — and startup rules will eat your margins for breakfast.
2. Find your actual people. Deliberately seek out content, communities, and advisors who are building your kind of business. Bootstrapped founders. Lifestyle business builders. People who celebrate making payroll twelve months in a row as the headline it is — because it is.
3. Get your numbers right. Revenue is a vanity metric if your profit margins are wrecked. The numbers that actually matter for a small business: owner's salary, profit margin per product or service, cash flow thirty and sixty days out, and client retention. Start there.
4. Be aggressively skeptical of scale advice. When someone tells you to hire before you're ready, spend on ads before your offer is dialed, or reinvest everything before you pay yourself — pause. Ask: was this advice written for a company burning through a Series A? If yes, it has no business being in your head.
5. Get operational support designed for your business — not someone else's. If you're overwhelmed, if the bottlenecks are multiplying, if you're working harder than ever and the numbers aren't reflecting that work — you don't need a business coach or a marketing agency. You need someone who can look at your entire system and help you build it correctly. For a small business. Not a startup.
The Takeaway
You don't have a startup. And if you've been treating your small business like one, I want you to feel the permission in these words: you can stop.
Your business doesn't need a hockey-stick growth trajectory. It doesn't need a seed round or a board of directors or a pivot. It needs clear systems, honest margins, a team that knows what they own, and an owner who actually gets paid.
Small is not a stepping stone. Small is not a consolation prize. Small is the strategy — if you build it right, with the right tools, the right metrics, and the right kind of support.
I learned the alternative the hard way.
You don't have to.
