If you own a small business, or are a shareholder or executive in a corporation what keeps you up at night? What are you thinking about while you stare at the ceiling with that pit in your stomach? Usually the surface issue is financial – meeting payroll, hitting sales goals, reducing expenses. The real issue is often something much deeper.
The odds for small business owners are not encouraging to the masses. Almost half of new businesses fail in the first year. The State of California notes that almost 80% of new businesses fail in the first 3 years. You choose not to be a part of that picture. You choose to succeed. You are part of the 9% of those who plan to start a business who actually do. So, as the second installment of small business week, we turn our attention to a deeper question:
“What is the Difference Between Companies that Fail and Those that Thrive?
According to the Wall Street Journal, the leading cause of business failure was determined to be “Incompetence”. Fully 46% of failures could be explained by this broad-brush term. The specific behaviors that underlie this headline, however, are fairly specific and revealing. These include:
- Taking an emotional approach to pricing
- Non-payment of taxes
- No knowledge of industry pricing conventions
- No knowledge of financing requirements and conventions
- No experience in record-keeping
- Living beyond the means of the business
- Lack of planning
Incompetence is a harsh term, but the realities of business can be stark as well. We prefer to state it a different way: focus on your areas of competence, the areas where you excel. The part of the business that got you to start your company, and that you enjoy most. Here is one of the greatest pieces of wisdom we can offer based on our decades of experience running multi-national corporations and mid-size and small businesses, and serving as business coaches and advisors:
“Successful business owners learn how to delegate their weaknesses to those for whom the core function is a strength.”
Let’s say your strength lies in business vision and the ability to generate orders – selling. Running a business is much more complex than simply generating orders. Most small business owners and corporate executives under-value accounting and business systems, and yet the critical numbers that inform good business decisions come out of the accounting and CRM systems you put in place.
Sales, production and customer service or just “service” are often seemingly at odds with one another. How do you fulfill that which you sell? How do you service your customers? What government regulatory and compliance issues do you face? How do you protect the “corporate veil” and manage critical HR functions?
What is your plan? What are the business strategies you will employ to accomplish it?
Your first hires should focus on the critical business areas which are outside of your core competencies, your strengths. Your ability to recognize your own weaknesses and limitations, and identify those individuals for whom those areas are strengths will go a long way to determining the ultimate success of your company.
It seems so simple: generate business, provide excellent products and services, give your customers a world class customer experience, manage corporate finances and pay your taxes. Business isn’t simple – thank goodness. Everyone would be competing against you if it were.
Business is a marvelous challenge. It’s a puzzle waiting for you to engage it and solve it, then it presents a new and more complex puzzle. Its a daily master that will test and challenge your limits, strengthening you and helping you to grow. It will provide rich rewards for you and those you care about, and those who join you in your mission.
At Allen Barron we are committed to that mission – to being a member of the team that helps you to reach and exceed your business goals. We are the coach that keeps you – the professional “athlete” – performing at your best. We help you to avoid the pitfalls of your chosen field of competition and succeed. We help you to learn how to take your business to the next level of performance – how to turn a $1M business into a $5M company, and on.
We invite you to contact us at 866-631-3470 for a free consultation to discuss what keeps you up at night, and how to successfully resolve it. We invite you to a business partnership that has one purpose: ensuring that you are one of the companies that survives, and prospers.