Small Business is the backbone of the American Economy. In 2014 it created 2/3rds of all new jobs and 73% of new jobs in 2015. Yet small business fails at an alarming rate with 50% in the first year and a troubling 96% within 10 years, according to some reporting agencies.
Business is hard and in that too many simply wake up and decide to start a business, not understanding what it takes to manage, lead and grow a sustainable small business is critical to being successful. While there is help of varying degrees of value for start-up businesses, it is normally academic in nature and not uniquely specific enough for many. Help for established small businesses, those that have been around for more than 2-3 years is relatively non-existent unless one includes business coaches that may be as inexperienced as the business owners they sell to or specialized business consultants who focus on two or three areas at most of a business and do not assist with any others. Frequently what they offer has been designed for larger businesses and they have simply made some changes to it in order to offer assistance to a smaller business.
Some key things business owners understand are:
- It is harder to sell than they thought
- Growing a business is not the same thing as being profitable
- They don’t truly understand the market they serve
- Anybody can start a business making it difficult to compete in a sea of lower price offering competitors.
Real business success requires sacrifice, is slower than they anticipated and utilizes skills they have not developed. They might be good at what they do, but they need help in leading a business.
Getting paid by their business may not happen in the first 1-3 years of operations…or longer.
Unfortunately, those who start a business with different expectations than that reality are the highest number of business failure. Further, there are many out there who tell them with a business plan, a website, some SEO and social media use, people will line up to give them their money. Unfortunately, that won’t happen. More, unfortunately, I have seen too many people lose houses and marriages because of that reality and their unrealistic expectations.
It doesn’t have to be that way at all.
The secret to success is first and foremost admitting to yourself that you need help. You need customized help and not one size fits all help. What that means is that basic foundation skills such as accounting and salesmanship can be learned in a classroom or pre-packaged presentation. The skills needed for your unique business needs won’t be found there, won’t be found through some free advice and mentoring programs and won’t be found from your next door neighbor unless they are named Marcus Lemonis.
As a business owner who desires a successful business, you need things that are unique to your business and that can be documented in such a way as to be repeatable and sustainable. You need information, structure, education and tools to help with the following:
Production and Product or Service Management
Material Management, Costing (Value Stream), Supply Chain, Quality and Error elimination. All with the goal of controlling or reducing costs sustainably.
Marketing and Sales
Market research, product/service price, lead generation, closing new business and contract management. All with the goal of increasing revenue sustainably.
Customer Service and Retention
Order management, order processing, and targeted up-selling while also focusing on retaining customers and recovering those who may be seeking another provider. All with the goal of sustainably increasing revenue.
Waste Management and Team Development
Waste reduction, increased productivity and efficiency. Additionally, education regarding employee engagement and team-building. The focus here is to reduce costs of production or service providing in a sustainable manner.
Everything in bold and underlined above works together with each other. None of it operates a business independently nor does it drive business success independently. As a business owner, you have to not only be knowledgeable of each area, you have to fully understand how they work together IN YOUR BUSINESS.
Other key ways of driving sustainable business success, combined with the above knowledge are :
1. Avoid a business plan until you seek funding.
2. Be clear about what your business does
3. Do not chase dollars.
4. Budget.
5. Understand the true value of cash and cash flow.
6. Don’t grow too fast, which includes not hiring new staff too fast.
While your business develops, so will your business skills. Whether you’ve been in business 2 years or 20 years, your business skills must constantly develop in these areas IF YOU WANT TO BE SUCCESSFUL AND SUSTAINABLE. After all, it’s your business and business future.
Want to know more? Ask me, I’m here to help.