The pitfalls of running a small business and what you can do to prevent these stumbling blocks.

The pitfalls of running a small business and what you can do to prevent these stumbling blocks.

Your business is nothing more than an extension of yourself!

A common mistake in small businesses is that business owners are too emotionally involved in the business and they get caught up running the business instead of outsourcing and focusing on their skills, talents and passion. As such the very reason they started the business does not get the attention it needs! 

They get stuck working in the business rather than on the business. 

Every business needs a person who is ultimately responsible for coming up with a strategy but most importantly the ability to delegate functions to the people who are best suited to deliver and drive the strategy home. Employing the right people is critical to the success of the business. Furthermore, it is essential that everyone is accountable and performance is continuously tracked and evaluated. If you think you can do it all, you are destined for failure or worse liquidation! It is a skill on its own when you realize either a) you are not the best person for the task and/or b) you are short of a resource with a particular skill set.

In this day and age, you can run a small business from anywhere in the world. Small businesses should be outsourcing as much as they can; contractors, remote PA’s, floating offices are growing at a rapid rate and you need to take employ for many reasons. One of the main reasons is that your cost structure is kept to a minimum. You are able to work efficiently and effectively with minimal fuss. Do not be afraid of outsourcing! Make use of the virtual “done for you service” that exists at our fingertips, especially when it comes to cutting edge technology shifts like digital marketing, CRM and personal assistants!

Building a prototype of your business is continuous work in progress; according to the E-Myth, a business has three integrated activities: Innovation, quantification and orchestration. Simply put: we need to action change relentlessly, quantify the results – both good or bad – and then work out a plan or framework on how to ensure replication over and over again.

Which leads me to 7 important development steps we need to consider:

  1. Primary Aim
  2. Strategic Objective
  3. Organization 
  4. Management 
  5. People Strategy
  6. Marketing Strategy
  7. Systems Strategy

Primary Aim- My favourite part! This is where you get to dream and think big. Having a purpose in life is hugely important but it is equally critical to monitor, and re- evaluate our course to ensure we are on track.

This is a time to be specific!

If you were chartering across the Atlantic and you were just 1 degree off your path, you would end up being miles and miles away from your original destination. It is the same in business! You will be surprised on how better your business will run when you have specific life and business goals aligned.

Strategic Objective – No dreaming required here, this is pure numbers and specific data that you need to make assumptions for thus growth of the business. It is best to do this in phases:

Phase 1 – start up 

Phase 2 – maturing Phase

Phase 3 – sale

These are very broad but you will need to set your quarterly and annual goals to succeed in each of these phases. 

Top Tip: Be conservative on your numbers and always devise a plan in your heart that you know you can beat.

Warren Buffet: ‘Always accommodate for a 20% buffer

Most important is to understand and have a handle on all the various metrics that move the needle. Remember this is your compass guiding you across the Atlantic!

Organization Chart – Be clear who is best suited to do what function, have KPI’s for each, make them accountable and outsource “done for you services” that you either do not have or are too costly.

Outsourcing “done for you services” will become your best friend!

Management Strategy – A trustworthy and well-structured management system is imperative. This strategy will save you but most important ensure a rigorous governance structure is in place and constantly monitor at all times.

People Strategy – I believe it’s important for your staff / partners to understand the grand master plan especially when undertaking specific jobs. If you are all working towards a common goal, you will ultimately achieve. Do your best to create an environment that has purpose, standards and a place of community to grow.

 Incentivize your people – help them help you!

If you can get this right, then the tasks at hand for your staff will be become more important to do than not doing them.

 Marketing Strategy – Always ensure you know what the market wants , not what you think it wants!

Clearly in this area there are many things to consider but it is very important that you keep up with technology trends and solutions to help you deliver this efficiently, cost effectively and always considering demographics and psychographics. 

Systems Strategy – There are 3 kinds: Hard (Physical),Soft (people)  and Information systems (Interaction and monitoring) are the most important !There is no substitute for these systems to be in place especially been able to monitor, challenge and assess the data. 

Important: All of the above 7 steps need to be interdependent of each other.

For some of you this may be obvious if not I hope I have helped in some way and would be happy to hear from you.

Work on your dream, know your numbers, have a functional plan, put strategies in place and have a system – don’t let the business control you.

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