What problems/questions do small and medium sized companies have regarding running and improving their business?
I do not mean the improvement of their product or service but the way they run and steer and grow their company.
There are so many answers in the market right now (all sorts of consultancy, training, methodologies etc) but what's the actual question that needs to be answered?
IMO, its lack of continual development, after the growth phase of the business, owners often take their foot of the pedal and relax a little, this enables other like companies to catch up, so by adopting the CI method to all aspects, the heart beat of a business stays strong
Change is not easy. People get hung up on the saying "if it's not broken don't fix it." The saying is true but "don't fix it" doesn't mean "don't improve it."
Change isn't easy.
The biggest problem is knowing how to lead employees to become highly motivated, highly committed, and fully engaged Superstars so that they will apply 100% of their brainpower and collaborate with other Superstars to make the business extremely successful in every way. Executives think their power is the power to direct, but directing a person to have high morale never works. The truth is that their power is the power to lead because people can be led to have high morale and high motivation.
How to do this is easy to learn and easy to execute.
Linda, it starts with mindset and belief systems. Within my research it became apparent that they tend to struggle with marketing, all financial management matters and administration.
To answer such a generalised question can be challenging as it eveidently starts with the individuals and their frame of reference.
I have been instrumental in creating a number of highly successful entrepreneurs and when their spiritual foundation is right, it is easy to motivate them and then get out of the way.
Proff. Hodgetts and Kurakto said: To truly grow and improve your business, you need to appoint someone equal to or better than you.
I have found this to be very sound advice.
Hi Linda. I concur with Paul Boyd and Walter Wise, and have an addition.
Small businesses need people from slightly larger businesses to help them get to the next level.
Many err by (1) hiring persons whose experience is with large enterprises (and who, by definition, lack a small company mentality) and (2) by not hiring that level of individual soon enough.
Not everyone can grow with a company so limitations must be recognized and at each stage, a new hire may be needed.
Hope that helps!
SME's can't hadle government regulations.they have no political cloute. Gov. offices, be it interior, environment, labour, and taxes, are forever reinventing their regulations. Big Organisations are either in the know, or can more easily afford profesionals that can minmize damages, or fight goverments in court.
As an SME I make it a point as much as I can to rub shoulders with the politicians but still I am always suprized.
This last year I would say 2 laws have cut my profits more than 10%.
1.Ministry of environment decided i cant throw my garbage where I used to (2 years ago i build according to their instuction the new dump).. Now I have to haul it 100 Km to a new site..extremly expensive..
2. My foreign labour permits were cut.
So advisors, consultantsand trainers, understand that it is the buiness environments and their derived expenses that are much more critical than any hype on the earnings side.
Looking for a good marketing pitch: "I will empower your company to get higher sales at lower costs - period, end of story!"
All companies have the same problem: the effective use of resource. The larger the company, the more differentiated the specifics of "effectiveness." This may seem simplistic but take any problem you face like finding more clients, there is something you aren't being effective at that you must decide to resource or abandon.
Of course, although you might find a "problem" in a specific area, there may be a more important lack of focus and resource assignment at a higher or earlier place in the organization - or market. Don't be pumping money into buggy whip research when you'll get more from attending to new products/new markets.
Now, if I'm allowed to go guessing, I'd say more businesses fail in two main areas. Resourcing sales at a rate that acquires new business above turnover rate (otherwise stagnation or deline) and CASHFLOW! The latter being the demise of most small businesses. The former has an array of sources from lack of focus on key product or service (not - not plural!), lack of message/marketing differentiation i.e. selling on price, etc. etc.
I can rattle on about innovation and leadership culture etc. but come on... business is a social environment but not a religion. Everyone in an organization should know the top product/service and the quality aspects from the customer perspective.
For me the question that needs to be asked is: How do I run an efficient operations that will operate effectively even when I am not around.
- Have a clearly documented and workable plan - lots of small and medium sized business have a plan but it is not clearly documented where they can analyze to see where they are, and know what drives each figure and how this affects their profitability.
- Your team/staff must know your plan. What do we need to achieve, why, how are we going to get there, what's in it for me? This gives a sense of ownership, accountability and fosters loyalty. Some business owners are reluctant to share information with their staff, but if they do not know then there is really no buy in to lets say provide excellent customer service.
- Careful consideration must be given in the hiring, selection, rewarding and recognition of staff. Sometimes a person may not meet all the knowledge criteria however they can fit in with the culture and this can be a big thing. Some people may also prefer more recognition than actual cash
- Know how you want your business to operate and have your policies and processes properly documented and re-visited and updated as the environment changes. Without documented policies and processes each person comes with their own way of doing things and also leaves with this knowledge. So if it was working for the company and they move on your operations may be in jeopardy.
- Incorporate technology - this is how the business world operates and you do not want to be left behind. You do not necessarily need an IT person but this must be part of your strategy. E.g using technology you can be in another country and have a web based meeting (webinar) any time you desire with your staff.
- Be a Leader and not a Manager. It makes a difference.
I think the first mistake people make is hiring the wrong people to help them - be it employees or contractors. The worst thing you can do is hire some people who just want a job but don't really have a passion for what your business provides. It costs less in the long run to pay more for true company ambassadors and invest in their training and career goals - show them you care about them as human beings. When you do that, people call in sick less often and treat your customers like they should be.
Second, small and medium business owners often don't invest enough time and money setting up not just their marketing campaigns, but marketing PROCESSES. They often just throw something out there and then wonder why they're spending so much money on marketing without much return so they either give up on marketing or have to go back and put a system in place.
Practice does NOT make perfect. Proper practice makes perfect.
Most small companies we have worked with that need to improve their business are too busy running their business to learn how to run their business properly.
It is not so much a lack of resources or even desire...but a lack of discipline. We have a saying, "Buying a 'Bowflex' does not make you look like the guy in the commercial, but the continued and effective use of one will."
(We have no vested interest in Bowflex) :)