We all hear about the alarming statistics stating spectacular rates of failure for small business in Australia. The numbers are enough to scare off most budding entrepreneurs. Surprisingly, we hear little about the key success factors. Those things, which done well, could help your small business flourish.
I talked to Margie Sheedy, author of The Small Business Success Guide, to discuss the keys to the successful operation of a small business. Her insight, as both an entrepreneur, and a small business journalist with more than 20 years experience under her belt, will prove valuable for all small business, regardless of the industry.
KP: What do you believe are the keys to owning and operating a small business?
Owing a small business is a spectacularly individual adventure. You’ll have different levels of entrepreneurial experience from the small business owner next to you. What is universal is that you’re expected to know a lot about everything in business, from marketing and managing staff to cashflow and customers, often straight away.
So one of the major keys to being a successful small business owner is opening yourself up to finding trustworthy, practical ideas, and then putting them into a plan. As a business owner myself, I know how time-consuming this can be. That’s why I wrote The Small Business Success Guide in a question and answer format, so that all the information you need is in one easy-to-understand resource.
KP: Why are these ‘success keys’ so important to the running of the business?
Getting the right advice means you don’t have to reinvent the wheel. You can hit the ground running. You also will be giving yourself the time to think strategically about your business (working on, not just in your business). That way, you’ll know exactly why you do certain things, and how you could do them smarter, not harder.
KP: From your experience, where do you believe most business owners get it wrong?
Most people start a small business without having anything written down. They think that having a vision in their heads is enough. But when your business playing field changes – for example, there could be a lull in sales, production prices might go up or your customers’ tastes may change – you won’t have any articulated strategies to help you and your team weather the storm.
On the flip-side, when things are going well you will also have problems. You might need finance to grow or you may want to sell your business. Even the most generous bank manager or business purchaser will want to see why your business is worth the investment. And they’ll need more than your word to seal the deal.
KP: Many entrepreneurs are wearing many hats, and can feel overwhelmed, what can they do to overcome this situation?
Realise that you can’t do it all. Start to think of yourself as the brain surgeon of your business, and value your time. Would you pay a brain surgeon to mop up after an operation? Consider enlisting the help of others to do some of the more menial tasks in your business.
If you think you can’t afford to outsource anything, or you like wearing all your hats, you will burn yourself out. Instead, learn to delegate so that you have time to seriously look at your business’ future direction.
Another way to take the stress out of wearing many hats is to plan your day in chunks of time. Allocate several times a day to answer calls. Stick to your schedule, not someone else’s. Then at the end of the day, you’ll feel a sense of achievement because you’ll have actually got a few things done and not spent it chasing your tail.
And finally, be aware of your stress levels. Recognise how stress affects you physically. When things feel overwhelming, make a conscious effort to stop, take a deep breath and calmly go for a walk to clear your head. It will be time well spent!
KP: Despite many claiming the Global Financial Crisis to be over, many business owners are still facing challenges, what is your advice to them?
Address the worst things first. In The Small Business Success Guide, I quote Dr. Graham Godbee of the Macquarie Graduate School of Management: he calls this your ‘triage strategy’. What sort of injury (major challenges) is your business encountering? Are you bleeding internally or just in need of a band-aid solution? Look at what’s caused the injury, and how you can fix it. Here are a couple of tips.
* Keep a firm eye on your cash flow so that you know exactly where your business is at financially, and how much time you have before any financial challenges make things more serious.
* Nurture your existing customers. It’s six times more profitable to sell to an existing customer than to find new ones. So foster relationships and give great customer service: after all, it’s your customers, clients and suppliers who will sustain you through tough times.
* Talk to your team. How do they think your business can do things better? Use their brain power to help you work out some solutions to your challenges. By engaging them, you’ll be motivating your team. A healthy business, after all, is somewhere people like to go to every day.
* Be honest about your own strengths and weaknesses, and commit yourself to doing things differently if your management style is part of the problem.
* Ask for outside help from advisers you trust, such as your accountant or solicitor or business adviser. Remember, a dumb question is only dumb if you don’t ask it.