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

June 4, 2012

The Inner Game of Business Growth

Why do some businesses grow rapidly while others struggle for growth and profitability? The difference often lies within the noggin of the owner. You are the biggest asset of your business, and more than likely the biggest bottleneck as well.

How about you? Is the way you run your business a barrier to your growth, profitability, and ease of operation?

Self-defeating management habits, attitudes and beliefs pervade the “crazy makers” I hear from business owners all the time. If you look at yourself, you may notice contradictory attitudes like these:

On the one hand . . . On the other hand . . .

• I can’t get all my work done. . . . I’m not hiring another employee.

• I must learn how to manage my time better. . . . I can’t find the time to make the needed changes in how I use my time.

• We’ve got to stay on budget. . . . I can’t resist making last minute design changes.

Pulled by conflicting attitudes

• We’ve got to watch costs. . . . I can’t be bothered to review the financials.

• Low margins are killing us. . . . I can’t bring myself to raise prices.

• I’ve got to take more time away from the business. . . . I can’t leave my managers alone. I can’t totally trust them.

• I need more skilled employees. . . . I’m afraid I’ll just train my own competition. I’m afraid I won’t have enough work to keep them busy.

• I need more sales. . . . Marketing scares me. I wish customers would just come.

• I get so tangled up in day-to-day operations that I lose sight of my vision. . . . I doubt the value of having a plan.

• I want to ease up and work fewer hours. . . . I can’t change my belief that hard work is necessary.

If you are nodding your head, “Yep, that’s me!” for any of these, you’re not alone. Crazy makers like these bog down many entrepreneurs.

This is the theme of my new ebook, “The Inner Game of Growth,” which shows you how to resolve these crazy makers.

I also offer you a freebie phone session on how to tackle contradictory attitudes like this using two simple tools. Just call me, 415-491-1896.

April 10, 2012

To Thrive, Banish Doom and Gloom

“I let myself get discouraged by telling and retelling the same old story of woe about how bad things were. This was killing the business. During the plan workshop, I wrote it all out in excruciating detail, took one last look and then tore it up in little pieces. Now the slate is clean for the coming year. From now on, I’m talking about how we’re laying the groundwork for recovery.”

You do the same. And don’t hang with doom and gloomers; stick with the problem solvers.

“The last two years have been humbling. I saw how arrogant I’d been. We assumed that growth would just keep going. But when the phone stopped ringing, we had to relearn Marketing 101. For example, setting targets for number of new clients, and tactics how to bring them in. We should have been doing this all along.”

This is one of the lessons in How to Thrive in Tough Times—Lessons From Small Business Owners–my newest ebook, just posted on Amazon for Kindle, iPad, etc. for $2.99.

November 29, 2011

Business growth dilemma #3: Grow profit while you keep personal touch

Many businesses lose their personal touch as they grow. This is the classic struggle between “corporate bean counters”—profitable and impersonal, and “mom and pop”–small and happy but poor and hard working.

We know that growth and profitability spring from good systems and procedures. The things you used to make up as you go along, you must now do by the book. Everything you do must make the numbers. Alas, the personal touch that customers love seems threatened.

So how can you retain your personal touch while improving efficiency, productivity—and profitability?

It requires a shift in attitude.

The owner of a retail store said to me, “My employees—and me also—used to resist all these systems and procedures. We wanted to serve each customer in our individual way. But we found that systematizing the routine things allowed us to be more creative and personal with customers. And customers loved the consistency and predictability in our operations.”

Another owner said, “My business is an expression of my soul. So if I wasn’t there all the time, the business suffered. So I was chained to the business. To launch a second location, I had to find a way to ‘bottle my soul’ and train others to run things by my values and standards. And they still have to make their numbers!”

You must turn your viewpoint around, and view systems and procedures as a way to maintain your personal touch rather than overwhelming it.

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

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 5, 2011

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

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.

September 29, 2011

What Drives You Crazy About Growing Your Business?

Filed under: Overcome growth barriers — Tags: , , — Mike Van Horn @ 7:00 pm

What’s the difference between a company that seems to grow with ease and one that has a lot of problems growing? Often it’s the owner’s management style and attitudes that get in the way.

“Well, in my case,” you say, “it’s the problems we encounter selling in such a tough market.” Maybe. But if we talk, we may discover that your real difficulty in selling is related to the need for better tracking systems, or for more consistent effort, or for better training of your sales people. Or it may be related to your own attitude toward marketing and selling. Many I work with seem to have the attitude, “When all else fails, try some marketing!”

Tough competition, unresponsive customers, bad economy—these things are true for everybody. Yet many companies like yours are thriving. What’s the difference?
Start with your own (often-unstated) beliefs, attitudes, and work habits. I’ll give some examples, based on my work with business owners, here and in upcoming posts. Here’s one I hear all the time as an excuse why growth is not worth the effort:

Myth: “Only I can do this job right.”
“I can do it so much faster and better than anyone else.”
“It takes so much effort to manage others. I might as well do it myself.”
“My unique creative ability has gotten us where we are.
“It’s hard to let go and turn things over to my employees.”

These attitudes and beliefs can impede your growth.
People state such things as if they were cast in stone, but what I hear are beliefs and attitudes that could be changed, thus opening the door to growth and profitability. So I’m calling this a myth. After each myth in upcoming posts, I’ll give an example of how it can be turned around. Let’s start with this one:

On the one hand, you believe: “Only I can do this right.”
But on the other hand, you also complain, “I hire good people to help me, but end up just training my competitors.” These contradictory attitudes together reinforce your growth barrier.

What I see: You hire good people, but then continue with the attitude that only you can do certain jobs. The result is that they feel constrained in the job, never fully trusted, or not able to live up to the job they were hired for. Thus, you tend to drive them away. They may go to work for a competitor, or set up their own similar business.

Recommendation: Shift your management style so that you give them challenge and responsibility; they then feel better about staying with you and advancing within your company. And you are freed up to focus on growth.

Change your management style? Easier said than done, you say. But stay tuned. I’ll show how to make this happen in future posts.

This is a major theme in my “Top 3 Barriers to Small Business Growth” program.

August 8, 2011

The Power of a Strong #2

“I’m now getting a glimpse of what I can do in my business if I’m not in charge of day to day operations.”

So says a woman who owns an eight-person professional service company and who just hired a top-notch marketing associate. “Execution–doing the work–isn’t our problem; it’s keeping the pipeline filled. That’s what I can focus on now that she’s handing the operational side.”

“Now that she is coordinating my staff, making sure they are working efficiently, using their time well, and keeping the clients happy, I have the bandwidth to turn my attention to building the strategic relationships in order to expand our service area.”

“She’s expensive. But what choice do I have if I want to grow? I’ve got to be willing to invest in my business—especially right now as the economy is beginning to turn around. I’ve got to be there to take advantage of the opportunities that are happening right now. If I don’t, the others will be passing me by. The key is selecting that person who can do the job—even better than I could—so that she pays for herself many times over.”

I couldn’t say it better myself!

So who is the strong support person you should bring in (or groom) to free you to leap into the emerging opportunities?

August 2, 2011

Are You Too Old to Get Hired?

Filed under: Employees and Human Resources — Tags: , , — Mike Van Horn @ 4:48 pm
My response to BNET post by Suzanne Lucas, the “Evil HR Lady,” on 7.29.11 advising older workers (over 40!) how to get hired, when they likely face tacit age bias.
Here’s another suggestion: Look at job opportunities in smaller companies. I advise owners of small and growing businesses. Few of them are UNDER 40. When hiring for professional-level jobs, they want the best professionals. These owners have often been burned by younger employees, many of whom have poor work habits (e.g., spending too much work time on the iPhone), and an unrealistic viewpoint on job perks and advancement.

Here’s what these owners look for in a candidate. Many older people have a strong edge in these:
— Know the ropes. Good work ethic.
— Professional demeanor and appearance.
— Ability and willingness to master new systems and technologies. Not Facebook and Twitter, but accounting and inventory control.
— Practical experience handling varied situations. Not just book learning.
— Strong customer service personalities. Customers like maturity. So do vendors.
— Used to taking initiative, solving problems, and then telling how they solved it. Not asking how to handle every unfamiliar thing.
— Likely to stick around. Not constantly shopping their resume around.
— Seen as a wise and mature person by other employees, especially subordinates.
— Kids are older or grown. Fewer sudden absences because little Johnny has the sniffles.
— Can see the managerial picture. Good understanding of what the owner is up against. Able to take the viewpoint of the company, rather than acting like a “shop steward.”

Many owners I work with are looking for a strong #2–someone with the capability of taking a leading position in the company, to free the owner up to focus on strategic concerns. One of my clients recently hired a woman in her late 40s to become the ops manager of her 10-person company. They are now negotiating for the manager to buy her out, so my client can retire.

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April 4, 2011

Can Your Business Run Itself?

Filed under: Entrepreneurship,Growth Management — Tags: , , — Mike Van Horn @ 10:34 am

I.e., can you ever take a vacation?

“If I leave, my business will fall apart!” Does this sound like you? Want to change that? Then ask yourself: What must happen so that you feel comfortable taking a three-week vacation—without your cell phone? “Three week vacation?” asks the owner of a busy store incredulously. “When I look at my floor managers, I fear taking a three-day weekend!”

What’s the #1 requirement for a stress-free vacation? You must have good people in place. The better your people, the longer you can safely be away. Some of us have “long weekend assistants”—that is, we can rely on them if we take off a Friday or Monday—and some of us have “world cruise assistants.” It’s a great feeling to return after a sojourn to Italy and find everything running smoothly. 

Do you say, “The business is me”? If so, then you can never leave. What do you handle in your business that no one else can? This is what limits the length of your absences. Start by listing the tasks and responsibilities that someone would have to handle in your absence. How frequently must these tasks be done? 

More prep = longer trips. How many high-level tasks can your people handle? The more lead-time you have, the more you can do to prepare them. Here are four levels: 

Level 1. Delegate tasks to those already capable of handling them. Takes a few days to do this, and allows you to be gone a few days. 

Level 2. Simplify tasks so that others can more easily do them. This process can take a few weeks. 

Level 3. Train your people to take on more. This may take a month or two. 

Level 4. Hire and groom the person who can run your business in your absence. May take six months to hire and train this person, but then you can be gone for an extended time. 

Perhaps you should start with a short trip. See how your people do when you are gone for a week, and work up to longer trips. Your people gain confidence, and you gain confidence in them. 

No cell phone on the beach. While you are gone, how often should you check in? Again, the more you trust your people to handle whatever comes up, the less you worry about this. DO NOT keep your cell phone with you 24/7. Instead, set specific times when you will check in with them. Be reachable in an emergency, but make sure they understand what constitutes an emergency. 

How did it go? 
When you finally go and then return, de-brief your people: How did they do? What went well? Where did problems arise? What should you do differently next time? Time after time owners report to me, “There were a few glitches, but things went amazingly well.”

“How to Have a Life” lessons for the busy business owner. 

1. Schedule your vacations far in advance. Put them on your calendar, buy the airline tickets, tell people you are going, and start making the work preparations.

2. Hire, train, and retain the best people—those who can free you up. Don’t let mediocre people keep you chained to the office. 
Do this even if you have only one part-timer.

3. This is about more than vacations. Running your business this way is the route to growth, profitability, and ease. 

The booby trap. You return, everything has gone well; your people have stepped up to the challenge and handled things better than you anticipated. But within a week or so, they fall back into the habit of relying on you more than they have to. 

Ah, yes! That’s the topic for another post.

Have a question about how your business can run well in your absence? Post it on my blog.

February 15, 2011

Tighten Up Your Growth Team

Filed under: Growth Management — Tags: , , , — Mike Van Horn @ 12:21 am

“I do what it takes, even if I must work 70 or 80 hours a week. Why don’t my managers do the same?” (Question from T on “Ask Mike.”)

mvh answer. It’s hard to find someone willing to work as hard as you are to grow your business. It’s not their baby. But maybe working long hours isn’t the key thing.

For you to expand your business, you must be able to entrust your current business to your top people. Your top managers must buy into your vision, hold to your values. They must understand the heart of your business. They must put their heart and talent into it, and be willing to go to the mat for it. When the stuff hits the fan, they must stay there till the fan gets cleaned up.

Their commitment may not equate to the number of hours they work. What really is the most important to you? Here’s what I think is most important:
— Work 110% when they are there. Be there when needed, especially the crunch times. Set days off and vacations around these.
— Excellence and competence in every action. They keep an eye out for the little details that need to be handled.
— Customer satisfaction is #1. And connecting with customers.
— Pay attention to the numbers and to the hours worked by the staff.

Your managers must exemplify these, and also ensure that their subordinates do so as well.

For this to work:
— You must have the right people in each job.
— They must be trained; you must tell them what you expect, and give them feedback and correction.
— You must have measurable performance standards, and they must be held accountable. You must hone your skills at managing managers.
— Their incentives must reward the most important things you want them to do.

If they don’t measure up, you must be willing to replace them.

However, sometimes you have a strong person who is in the wrong job. Could you redefine their job so they can excel? Assign the parts they don’t excel at to someone else.

But don’t let yourself be held back by their limitations. Insist on having people whose excellence will help you reach for the stars.

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