5 Key Problems For Small Companies… And How To Overcome ThemPosted 31 Jan 2018 Carl Reader looks at five key problems for small companies and how to overcome them
We’re all familiar with the horror statistics about entrepreneurship in the news - four in 10 small businesses don’t make it past five years.
As a Start Up Coach and business expert, I’ve worked with thousands of businesses and there are five key problems I see over and over again. I’m not going to claim there’s a magic solution, but there’s certainly a common theme to every single one and awareness of it puts you in a far stronger position for success. Here’s my guide to avoiding the most common business pitfalls:
Lack of action
The key to this is to remember you’re a business owner and you need to be motivated by yourself, not by a boss or leader. Sounds easy, doesn’t it? But for many the reality of that hits hard and it isn’t as easy as it sounds.
The idea has to work in practice, too, and making it work is entirely down to you. Motivation comes from within and it’s essential you’re accountable to yourself, your family, your employees and your business. Without that self-motivation, you won’t get far.
The focus of just being good at what they do, not at running a business
There’s a big difference between being a ‘technician’ and being a business owner.
It’s a hard lesson to learn, but just because you’re good at your technical skills that doesn’t make you good at running a business. You can find a great introduction to the concept of the difference between entrepreneurs, managers and technicians in Michael E Gerber’s book, The E-Myth Revisited.
You need to do your research into how to run a business successfully and don’t assume your technical knowledge alone will make it a success. You’ll need to learn new skills to be able to wear the wide variety of different hats your business will need - sales, marketing, HR and accounts are just a few to start with.
You also need to understand the mindset shift of going from being employed or indeed self-employed to being a business owner.
Being employed or self-employed is being reliant on one person - yourself - whereas being a business owner or an investor makes you reliant on multiple streams of income.
Most people, therefore, perceive being a business owner or an investor as riskier than being employed or self-employed. That’s a big shift in mindset to get your head around and make sure you’re comfortable with.
Reliance on promises from friends and family
Put your Richard Branson or Alan Sugar hat on and think about how they would approach a situation. If Richard Branson was about to launch a new product, do you think he’d be reliant on a relative buying it? Of course not.
Come at the situation as a business owner with a strategic perspective, not being swayed by the opinions of friends and family, because at the end of the day they very rarely put their hands in their pocket. Even if they do, you can’t rely on that being your sole source of customers.
The search for perfection rather than a minimum viable product
Quite simply, don’t look at it on a personal level. As a business owner, you should focus on a concept called the minimum viable product.
MVP is releasing something that’s fit for purpose and with your unique selling point, rather than trying to fulfil your entire road map from day one.
To find out what your MVP should include, you need to nail down:
- What it is you do.
- The customers you serve.
- Your USP over everyone else.
These are what you need to tick the boxes of to create your MVP. Everything else is superfluous at this stage.
You can want to offer more - it can and should be on your road map to come later. But to get things going and keep them moving, first do what you say you’re going to do and do it properly for the people you want to serve in the way you want to do it.
Then you can polish and tweak based on genuine feedback and situational understanding.
Fear of funding
This is the one that holds back so many business owners, because they think debt is bad and equity is bad. Quite frankly, you need to put your business owner’s hat on again and get over this misconception.
Understand there’s a difference between good debt and bad debt. There’s a world of difference between a debt racked up on a credit card on a few nights out and a debt that’s accumulated to enhance an asset.
Have you spotted the theme of the answers to all these problems? The key message is to approach your business as a business owner, not as an individual.
Treat your business as a business and adopt a business owner’s mindset in everything you do and you’re already on a higher path. Read more like this< Back