Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

October 8, 2011

Business Growth Dilemma #1–Doing Paid Work and Developing New Work

Filed under: Growth Management,Overcome growth barriers — Tags: , , — Mike Van Horn @ 4:32 pm

When we’ve got lots of work, we don’t have time to market. Then the work ends, and we have to start marketing to find another big project.

This is a classic entrepreneur’s dilemma, and it can lead to the dreaded boom and bust cycle. However, a mistaken assumption lies beneath this—that we don’t have time to do both customer work and business development.

When I question owners about where they spend their time, I usually discover a third category of activity—“minutiae” —that takes an inordinate amount of their time. Yet these routine admin tasks are the easiest to hand off to someone else. Once we do this, then we often have time for doing the work and the business development.

Some people enjoy one and resist the other. Love doing the work, hate doing the marketing. Or vice versa. So, you bury yourself in the work so that you can plausibly claim that you have no time for marketing.

What is your strength? Where do you make the biggest contribution to your company’s success? Could you arrange your business so that you could focus on your strength, and hand other things off to someone else? If you are best at bringing in the business, then hire someone to do a substantial part of the paid work for you. If you are best at working with customers, then hire someone to do business development for you. This should make your business grow and prosper, because you focus on the activity you are best at. And in either case, hire someone to handle admin and routine for you.

How can you afford to hire this extra person if you have a small business? Let’s assume you have a viable business with growth potential. So if you find a way to hire this needed help, it can pay off for you.

To figure this out, answer a few questions like these:
— What is the highest-skilled person you could bring in to give you the support you need to boost your company’s growth? What’s their job description? What personal qualities must they have?
— What’s their learning curve? How long would it take for this new hire to pull their own weight? The more experienced the person, the shorter their learning curve.
— What’s the upfront cost and payback period of hiring the expertise you need for growth? I.e., how much will you have to invest before profit from the new business generated covers the cost of this person?
— Are you willing to risk this investment in your business growth?
— How would you need to change the way you run your business to best take advantage of their skills? What habitual ways of running things would you have to change?

These are the questions we tackle in our program, “Top 3 Barriers to Business Growth—and How to Overcome Them.” Ask me about it.

October 6, 2011

Growth Plans for Small Business–Some Rules

Filed under: Planning — Tags: — Mike Van Horn @ 12:50 pm

Plan for what you can. Then plan how you’ll deal with all the things you can’t predict–i.e., the uncertainty.

Dilemmas, choice points, open questions. Any plan that does not address these is bound to fail.

A successful plan is brief (just one page), dog-eared, marked up, covered with coffee stains, because it gets regularly reviewed and revised.

Targets must be achievable–and changeable.

Be firm on your vision, but flexible on means. (Steve Jobs)

Create a practical plan of action for your business in our annual plan workshop “Success in 2012.”

October 5, 2011

Business Growth Myth #2. “I must oversee everything.”

Filed under: Growth Management,Overcome growth barriers — Tags: , , — Mike Van Horn @ 6:02 pm

Everybody comes to you, so you can’t get other things done. This is another management habit that can keep you from focusing on the things necessary for growth.

I often hear two related complaints that pull in opposite directions. Here are two examples:

1. “My customers—and my employees—always ask to talk to me, because I have the answers.”
But you also complain, “My managers do not handle as much responsibility as they should.”

2. “I need to watch the numbers. I just have to shut myself away in my office more.”
But you also say, “I need to keep in touch on the floor, both to know what is happening and to motivate my people.”

What I see about this. You are operating at two levels—manager and floor supervisor. While it is important for you to keep in touch with what is happening, the question is, how much? You are clearly invading the turf of your floor managers who should have the primary responsibility for keeping in touch and motivating the troops. Since you are doing part of their job, your managers feel frustrated and take less initiative.

My recommendation. Examine your own motivation. Is it possible you are holding on to the floor work—at which you feel more comfortable—to avoid facing bigger challenges, such as tracking the profitability of each thing you sell? Or developing new strategic alliances?

As your business grows, you must promote yourself from worker to supervisor to manager to CEO. Many owners get stuck at supervisor or manager, so their company in effect has no top executive. This is guaranteed to keep you small.

Do the work you enjoy, but find a way to do it that doesn’t conflict with the responsibilities you have given your managers. Maybe you should take one shift on the floor a week, just to keep in touch.

This is a major theme in my “Top 3 Barriers to Small Business Growth—and how to overcome them” program.

Powered by WordPress