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What I Learned Running a Small Business Here for 10 Years

Ten years of running a small business in Santa Cruz. What worked, what didn't, and what I wish someone had told me at the start.

Rock Hudson··6 min read
santa cruz business

Ten years is a long time and it isn't. I can remember my first client meeting, sitting at a wobbly table at a coffee shop on Mission Street, trying to look like I knew what I was doing. That was 2016. A decade of work between there and here, and I still use coffee shops, but the tables are sturdier now. Or maybe I just pick better ones.

Here's what I know now that I didn't know then. Not organized by theme or importance, because that's not how learning works. It accumulates unevenly.

You will be wrong about what your business is

When I started, I thought I was selling efficiency. Process improvement, workflow optimization, the operations stuff I'd done at bigger companies. Clean and tidy and measurable.

What I actually sell, it turns out, is peace of mind. People don't come to me because they want a better org chart. They come because something in their business is keeping them up at night, and they want it to stop. The operational work is how we get there, but the thing they're buying is the feeling of not being behind, not being overwhelmed, not dreading Monday.

It took me years to understand that distinction, and it changed everything about how I talk about what I do.

Your business will evolve away from your original idea. That's not failure. That's the business telling you what it actually wants to be. Listen to it.

The money thing

Year one, I made less than I would have made working part-time at a coffee shop. Year two was better but still tight. Year three, something shifted, and it started to work. By year five, I'd built something sustainable.

I'm telling you this not because my specific trajectory matters, but because the timeline is longer than people expect. The "six months to profitability" narrative that floats around the internet is, for most service businesses, fiction. If you're starting something, give yourself a real runway. Eighteen months minimum. Twenty-four if you can manage it.

The other money thing: I undercharged for the first three years. Badly. I was afraid that charging what my work was worth would scare people away. What it actually did was attract clients who didn't value the work, because they weren't paying enough to take it seriously. When I raised my rates, I lost some clients and gained better ones. Every business owner I know has this same story.

Saying no is a skill you have to develop

Early on, I said yes to everything. Every project, every client, every request that was adjacent to what I did but not quite it. I took on work I wasn't great at because I needed the revenue. I worked weekends because a client asked, and I didn't feel like I could push back.

This is normal and also unsustainable. At some point, probably around year four, I started saying no. No to projects that didn't fit. No to clients whose values didn't align with mine. No to meetings that could have been emails and emails that didn't need a response.

Every no created space for a better yes. That's not a platitude. It's arithmetic. You have a finite number of hours, and every hour spent on the wrong thing is an hour unavailable for the right thing.

Relationships outlast transactions

My best clients came from referrals. My best referrals came from people I'd helped years ago, sometimes people I'd never even formally worked with. A conversation at a chamber mixer in 2018 turned into a client in 2022. A favor I did for someone in 2019, looking at their books for an hour and giving them some free advice, turned into three referrals in 2020 when they told everyone they knew.

Santa Cruz is a small town. People remember how you treated them. They remember whether you were generous with your time, whether you were honest when things were hard, whether you showed up when it mattered. That reputation is worth more than any marketing budget.

The inverse is also true. In a town this size, a bad reputation is very hard to outrun.

Systems save you, eventually

For the first few years, I ran everything on willpower and memory. Client details in my head. Tasks on sticky notes. Follow-ups that happened when I remembered them, which was usually at 11 PM.

It worked until it didn't, which is how that approach always goes. The transition to actual systems, a real CRM, documented processes, scheduled check-ins, was painful and took longer than it should have. But once it was done, the relief was immediate.

This is what I tell my clients now. The work of building systems is unpleasant in the moment and life-changing in the result. You don't notice how much energy you're spending on remembering things until you stop having to remember them.

Take the surf

I live in Santa Cruz. The ocean is right there. And for the first several years of running this business, I almost never surfed during the week. I was too busy, too stressed, too convinced that every hour had to be "productive."

This was stupid, and I say that with full retrospective clarity. The mornings I surf, I work better the rest of the day. Not a little better. Noticeably better. Calmer, more creative, more patient with problems that would otherwise frustrate me. The hour in the water pays for itself three times over in the quality of everything that comes after.

Whatever your version of surfing is, hiking, gardening, reading, sitting on a bench at Seabright, do it during the workday sometimes. Not as a reward for finishing everything. As part of how you do the work.

People are the whole thing

The biggest mistake I see in small businesses, and the biggest mistake I made in mine, is treating people stuff as secondary to operations stuff. As if the processes and systems are the business, and the humans are just the ones operating them.

It's the opposite. The people are the business. The systems exist to support the people. When I finally internalized that, when I started every engagement by understanding the humans involved before looking at a single process, the work got dramatically better.

Your employees, your customers, your vendors, your fellow business owners. They're not inputs. They're the reason any of it matters.

You don't have to figure it out alone

I spent too long trying to solve every problem myself. Partly pride, partly frugality, partly the lonely-founder mentality that tells you asking for help is admitting weakness.

Getting help, whether that's a mentor, a peer group, an accountant who actually talks to you, or yes, a consultant, is not a weakness signal. It's an efficiency decision. Someone who's seen your problem before can save you months of fumbling. And in a town like this, those people are not hard to find.

Ten years in, I'm still learning. I hope that's still true at twenty.

What I Learned Running a Small Business Here for 10 Years | The Flow Report