This is supposed to be your dream come true. Finally, your business is up and running. You’re breathing life into your big idea. You no longer have to answer to the boss because you are the boss. You’re working your business plan. You’re finding your path to financial freedom. You know your target market and you’re finding new clients. You have positive feedback on your products and services. You’re developing new technology. You’re finding additional funding. You’ve finally found the right team to work with. You have the right workspace. You can feel the exciting energy when you walk into your business each morning.
Yes, there are bumps in the road, but you’re learning to be resourceful and to move through, over or around them. Each day is long and brings surprising new challenges, but you’re gaining momentum along with new customers and increased revenue. You learn to balance the ups and downs of the market and business challenges. You learn to pace yourself. But as time passes and you analyze your business growth, you see that the trend line isn’t moving upward, it’s declining. Your plans aren’t working out as you expected. At this rate, you’re not sure how long you can continue operating. You realize that as passionate as you are about the business, the problems are overwhelming you. Your dream is turning into a nightmare.
Why Small Businesses Fail
In spite of your best efforts, your business is succumbing to one of the top ten reasons that businesses fail. (Non-prioritized list according to Jay Goltz, The New York Times, January 5, 2011).
- Owners who cannot get out of their own way.
- Operational inefficiencies.
- Dysfunctional management.
- The lack of a succession plan.
- The math just doesn’t work.
- Out-of-control growth.
- Poor accounting.
- Lack of a cash cushion.
- Operational mediocrity.
- A declining market.
In particular, the first four reasons are linked to how you develop and structure your business. Small business owners who seek expert advice in running their business have a better shot at overcoming these pitfalls. To address them, here are eight tips for successful small business development that are critical components for you as a small business owner.
Tips for Success
- Be The Leader – Be purposeful about leading and designing your company for success. If you think you know everything necessary for success, and close your mind to new and different ideas, you AND your business will stop growing. Instead, find a business mentor, seek customer feedback, attend workshops, read books, keep a bias for learning and set the example for your team to learn.
- Manage Your Passion – Don’t let your passion manage you. Just because you love shoes, doesn’t mean you should open a shoe store. Make sure you’ve identified the void in the marketplace that your business can fill; or the need that you’re satisfying. Make sure you know your target market, and understand what they’re willing to pay and do for your product or service. Most importantly, assess your financial resources. There are too many stories of entrepreneurs who had what seemed to be a great idea, but got over their heads into debt, and tumbled into bankruptcy.
- Increase Business Value – Your greatest business value resides in your people, processes, products/services, technology and customer relationships. It’s important to understand the right combination and how you best provide it to others. Then preserve and improve on that. For instance, the fact that you guarantee same-day service, and thorough clean up by your service technicians could be your greatest value. But to provide that, you must have a sufficient number of trained technicians on call at all times; and a reliable 24/7 contact and communication process.
- Build Your Culture – This is the DNA of your business. Whenever a client comes in contact with your business, whether face-to-face, by phone, by email, or by social media, they gain nuances and impressions that determine whether they want to continue to engage with you again. Set the tone by treating your employees the way that you want them to treat your customers. Make customer service a priority. Create an environment that is welcoming and comfortable. Ensure that the style or décor will appeal to your target market, and effectively represent your product or service.
- Position Your Family – Do you have a family business or a business family? Does your business exist as a place to employ your family or a place to serve your clients? The wonderful family members who helped you to get started may need to evolve to different supporting roles as the business grows, to ensure that you have the most qualified people in the positions where they can perform well.
- Develop Your Successor – Your role in founding your business is important, but none of us are irreplaceable. Constantly develop others to learn the business, and make leadership decisions based on who and what will add value to the business. When the business has greater value to your clients, you will benefit from that.
- Understand Business Roles – Roles and responsibilities must shift as the business grows and/or the market shifts. Be flexible, clarify responsibilities, and hold the right people accountable.
- Document Business Processes – Continually review and update your operating processes to ensure maximum efficiencies. Involve the employees who actually perform the work, and find ways to eliminate waste, rework and scrap because they all result in lost money.
So take time now to plan for your business. Becoming a small business owner is a lot like falling in love. Once you fall madly in love with a seemingly fantastic person, it’s more difficult to recognize your areas of incompatibility. Similarly, once you have a seemingly fantastic business idea that you’re passionate about, it’s more difficult to see the potential pitfalls to your success. Plan with a clear head, and a focus on how you can serve others.
Miles O’Brien woke up and sensed that his left arm was there. But when he looked down, it was gone…amputated during surgery as a result of a freak injury several days prior. He wondered how he would provide for his family and perform little but important daily functions that we take for granted. As an award-winning science journalist and CNN contributor he traveled extensively, and was an active sports enthusiast. So what would his life be like now? Rather than retreat into the shadows, he dove into the rehabilitation process and challenged his occupational therapists and prosthetist to help him find ways to continue his normal activity level. They quickly responded and helped him to fulfill his plans of traveling to the Artic, including camping for 4 days on the Denali ice sheet, and riding his bicycle 300 miles across Michigan in two days. But to do so they had to outfit him with equipment and prostheses to replace his arm. He couldn’t function without a workaround strategy to replace that arm, because his body, and our bodies, needs two arms for balance.
Most aspects of our daily functionality are based on having two arms. Two arms support our mobility, flexibility and dexterity. They increase our capability to lift and carry objects, multi-task, and find our equilibrium. The majority of the population is right handed, but some (like me) are left handed, simply indicating our ability and preference to perform more tasks with that hand. But even when using the preferred hand or arm, we need the other one to complement our actions. Our arms and hands are cross-wired from our brains, thus the left side or hemisphere of our brain controls movement on the right side of our body, and the right hemisphere of our brain controls movement on the left side of our body. Each side of the brain has a functional specialization, for example, the left hemisphere controls mathematical, analytical and logical processing, whereas the right hemisphere controls sense perception, emotion processing and artistic functions. All are complementary to the full and balanced functionality of our bodies and behaviors.
But this balance is not only important in the mobility of our bodies, but in the mobility of our leadership functionality. The leader of an organization is most effective with a balance of skillsets and inputs on his or her team. The leader needs a left and a right hand balance.
William Heyman is one of those right hand (left hemisphere) persons. Heyman is the vice-chairman and chief investment officer of Travelers. He’s held the position for the past 10 years, and during that time the company’s stock has had a 267% return compared with the 109% return on the S&P 500. He sticks to a conservative investment strategy even when the market seems to be exploding or imploding, and resists the temptation to invest in the latest hot tip. He’s a trusted advisor to Jay Fishman, Chairman and CEO of the company, and known for his ability to think through risk and reward probabilities. He grew up around well-known investors and gained decades of Wall Street experience that positioned him for this role. He provides strong analytical and logical balance to the leadership team.
On the left hand (right hemisphere), Jay Fishman has an instinct for the insurance business. He believes that the most successful CEOs can sense what’s going on in their business even before it shows up in the numbers. Fishman makes it a point to spend time with his 13,000 independent brokers and agents, answering their questions and understanding their issues. He even attends their funerals and that of their close family members. And he encourages them to spend time with their clients to ensure that they understand consumer needs. His detailed communications with Wall Street analysts have earned him plaudits for honesty and insight into the business. Fishman has built an organization that complements his insurance instincts as his team evaluates decisions to ensure that they are aligned with the goal. This has paid off as they weathered the 2008 downturn, along with massive hurricanes, tornados and floods in the past decade, to deliver strong returns. Fishman’s team complements his skillsets, and provides balance to their collective leadership decisions.
Every leader needs individuals on his or her team to provide the predominately left and right hand perspectives in a manner that balances their thought process and decisions. Just as the brain integrates the inputs from centers of expertise in the right and left hemisphere, so the leader must seamlessly integrate these inputs from his or her team to balance and lead thoughtfully. It’s a collective effort, requiring coordination and agility, yet when beautifully executed, demonstrates the necessary well rounded capability to accomplish greater exploits.
Jay Fishman will learn a new level of balance in the coming months and years. In late 2014, he announced that he had been diagnosed with a neuromuscular condition. While it won’t impact his ability to run the company, it might require him to use a cane in the future. Unfortunately, like Miles O’Brien, he’ll have to make some physical adjustments, but similar to achieving balance on his team, he’ll learn a new level of perfect balance.
Photo is O’Brien in Barrow, Alaska on assignment for NEWSHOUR and NSF, his first assignment after his amputation. Photo by Kate Tobin, May 29, 2014 taken from www.milesobrien.com.
Click here to read more about Miles O’Brien on CNN.
Click here to read more about William Heyman in the March 2, 2015 issues of Forbes.
Ideation space. The optimal environment where you form ideas or thoughts, where dreams crystalize, desires are birthed, problems are solved, and creativity blossoms. A place where your senses are heightened as you connect deeply with your inner motivations and interests, and block out external distractions. Purposefully spending time in this space requires disconnecting from the daily demands of the urgent and immediate, to connect with the important and meaningful. It involves moving from the emotions of the moment, to reflecting on the underlying values and beliefs that govern your life. Time spent in your ideation space can rejuvenate you to become more productive, focused, and innovative.
But what you do after you’ve spent time in your ideation space makes all the difference. Do you move forward, carefully clutching the thoughts produced during that time like they are priceless pearls to be inlaid to a majestic setting, or the inspiration to Michelangelo’s painting in the Sistine Chapel? Or are your warm thoughts quickly dampened as if hit by a cold blast of artic air. You must protect the ideas and insights you’ve gained and look for the opportunity to apply them, to test them, to turn them into reality. You must take action as a result of your time in your ideation space.
The ideation space for Max Levchin (co-founder of PayPal) is his company named HVF, short for Hard Valuable Fun. He considers it the intellectual outlet for all the ideas that pop up in his brain. The team focuses on leveraging data collected through low cost sensors, wireless broadband, and advances in distributed computing and storage, to develop value added applications. One of their latest products is an app called Glow, which crunches and analyzes vast quantities of data to provide information and insights about women’s bodies; providing them with the optimal timing for conception and enabling them to make appropriate decisions about their reproductive health.
Marc Benioff, CEO and founder of Salesforce.com is energized by being around customers and other creative people. They stimulate his thinking and get him to ask the right questions. Benioff believes that the quality of his questions on a topic directly correlate to the quality of his innovation. Like Andy Grove, he believes that “only the paranoid survive,” and is thus constantly thinking about inventions for the future, even if it means ditching something he’s started, and beginning again.
Like individuals, teams also have an ideation space. This is where they become more productive; think out of the box; and find new ways to solve old problems, innovate and challenge the status quo. Visionary leaders ensure that they provide the right environment for ideation, prioritize time for the team to engage in this practice, and take action on the outputs from this engagement. This means creating the right setting for collaboration on projects, or for casual discussions that morph into creative brainstorming. The aesthetics of the workspace, use of color, furniture style, textures, sunlight and exterior view all play a key role; along with the ability to capture and find the connections between ideas, issues, and problems. Sometimes it involves creating a lab to model or diagram new ideas; and at other times its just getting the team out of their normal environment into a different space will spark different ideas.
As a leader, how are you creating the right ideation space for your team? How are you providing the right environment for them to think from a different perspective, to test ideas that may become game changers for your organization? How can you set the stage for them to be more creative, and to solve problems? Having an ideation space is an investment in your team members as individuals and as a collective group. It could be a “go to” meeting spot, but more effectively, it’s part of their daily work atmosphere, so that they can integrate the problem solving process into their normal routine. You can involve them in the process of designing their work space, of developing their work processes and seeing their ideas come to life. Find ways to provide “rewards” for new ideas even if they aren’t feasible, but to simply get the team into the mode of thinking differently. This will form the foundation of coming up with the ones that will be very successful.
And finally, model the behavior that you want them to exhibit. Think about your own optimal ideation space and share what that looks like with the team. Talk about what it takes to stimulate your own thought process and encourage them to do the same. Discuss the benefits of spending time in this space so that everyone understands it is a priority. Enjoy your ideation space.
Copyright 2015, Priscilla Archangel
Learn more about Max Levchin at www.hvflabs.com
Read more about Marc Benioff in the February 1, 2015 issue of Fortune here.