What are the 5 most critical challenges for you to address if your business is to thrive and leave you able to enjoy the fruits of your work? Here I'd like to share my own Top 5, based on the 16 years I've spent building a number of successful small businesses.
During that time I've had the privilege of serving, partnering with and buying from a wide array of small businesses. The following are the challenges that I've seen hold small businesses back most consistently - and that Founders have often found it hardest to address:
This first one is such a critical topic I'm addressing it through a series of presentations (see info). One major constraint on the rate of growth a business achieves is its ability to bring in a consistent and sizeable flow of quality leads. If the quality of leads isn't high enough, profitability will always suffer from the sales costs of interacting with such a high number of "prospects".
A key success factor for any small business is to find ways of bringing leads into the business that are i) not reliant on key individuals, ii) are readily scaleable and iii) are pre-screened so that sales efforts are focused only on the most promising of prospects. Can you disappear on holiday for a couple of weeks and come back knowing that there'll have been no discernible blip in new client leads and sales volumes? If not - or if that thought makes you feel anxious - there's work to be done on improving your lead generation activities.
The second challenge is poisonous. Worrying about cashflow, about whether you have the funds in the bank to pay your bills, can be a huge drag on a business. Firstly it can be a huge source of anxiety for the business owner and distract them from being the inspirational source of motivation and leadership that the business really needs. Secondly it can hamper the speed at which you grow - since your ability to invest in smart ideas is constantly constrained by your ability to finance them.
Some of the most successful small businesses out there have built their products or services around payment plans and practices that mean the business actually gets the money in the bank before it's had an outlay of costs to deliver on those sales. If your business sells either to consumers or to other small and medium sized businesses, you'd be amazed to discover just how many businesses have sold their offerings in ways that involve payment being received up front. Challenge yourself long and hard before caving in to any conclusion that this can't be done in your market. The upsides from removing cashflow worries from your business are worth more than a cursory thought - and indeed are worth restructuring your whole offering around.
The third challenge is undoubtedly tough. As a business owner, you need to focus your time on doing the most value-adding things in your company. When you started out you may well have gotten involved in everything. You may have become quite the expert at a whole variety of business-essential activities, tasks and tactics.
There comes a point though where your limited time becomes a serious constraint on the growth of your business. There are only so many years you can burn the candles at both ends without paying the price. To ever fully enjoy the fruits of your labour, you're going to need to learn to delegate much of what you do to other people. There are people far more knowledgeable about this subject than me, so I'll defer largely to their wisdom.
For completeness though, my own experiences suggest you have to be prepared to accept periods of time when you feel like business results are suffering, in order that you may invest the necessary hours in bringing your colleagues up to a level of expertise that you can live with. Notice here I say "that you can live with". Some aspects of what you've learnt to do you've become such an expert at, it's not realistic to expect anyone else to jump in and fill your shoes to your complete satisfaction without a considerable window of time for learning. A key part of delegating is accepting that someone doing a job 80% as well as you might have done it is still driving the business forward. It's a mindset that many business founders struggle to accept - and in doing so, therefore inadvertently make their own time limitations a massive constraint on the growth of the business.
What may seem like a related topic is becoming ruthless at deciding what can and cannot be outsourced. There's often a certain prestige associated with growing a large team of staff and strolling in of a morning to that ever growing office space. Be wary though. Outsourcing can give you access to levels of expertise that you simply couldn't have afforded to hire in-house. It can allow you to react and adapt in your business far faster than if relying on internal hires. It usually involves a far smaller financial commitment and so leaves your business much more resilient to riding out any financial shocks that the business may suffer as well.
I still remember the weight that was lifted from my shoulders when I first outsourced a key element of the operations (our finance function) in the early years of my first business. The time that was freed up in my day was a real boon for the business - and being able to turn to real subject matter experts paid off time and time again. I challenge you to think about every aspect of your business - your lead generation, your website, your social media presence, your HR function, your Finance function.... and force yourself to justify why that particular part of the business needs to remain in-house. There are almost certainly cost-savings to be made by outsourcing. You'll probably become more expert in that area if you outsource too. So unless it is so strategic that you business just cannot let go of it, think seriously about outsourcing.
Last but by no means least is the challenge of building a scaleable business. So many small companies I've worked with have grown in a piecemeal fashion. They've evolved how the business functions from year to year to adapt to the fact that they're now a bigger operation. But that is entirely different from building a business to be scaleable from the outset. All too often, businesses become locked into the way they do things - locked into extremely costly and ineffective processes and supplier arrangements - because the founder hasn't regularly stopped to think about scaleability.
So I encourage you to think about your business now and imagine it being a business that is ten times larger. What challenges would you face that you barely face today. What processes and tactics could you do totally differently today if you knew with certainty that you would soon be ten times bigger? Wherever you identify something that would need to be done very differently, try to build the business from today onwards in a way that accommodates that need for efficient growth. You'll end up being able to grow far faster and with far less stress and pressure in the long run.
I've thoroughly enjoyed thinking about this post and the various challenges I've encountered in my time as an entrepreneur. I really hope it's given you at least one thing you can go away and reflect seriously upon in the coming days. If you have other points to add to the list, please do comment via the box below - or fire me across a tweet on @tonyrestell. Best of luck to you and may you take your business to a totally different level in the coming years.
Back to Small Business blogs
Social Hire - the Social Media Agency for recruiters and small businesses. With outstanding Social Media Agency reviews on Google and exceptional client retention rates, the team at Social Hire really do know what works (and just as importantly, what doesn’t work). Why not engage a Social Media Agency that not only gets results, but that does so for a third of the cost of employing an in-house Social Media Manager? Simply click "Book a Call" to speak to one of our friendly team.