This year, as the economy is beginning to recover, is your small business poised for growth? If you’re not sure, take this quiz. It has seven questions that’ll help you prepare your business to grow.
There is a lot of attention directed at small businesses this year.
President Obama talked about the need to help and support small businesses in his State of the Union address. And one outcome was the launch of Startup America. Also, states are talking about easing regulations and the tax burden on small businesses in their quest to reduce unemployment.
Is this the year of the small business?
Is this an opportunity for you as a small business owner?
Now, a Warning to Small Business Owners…
As a small business owner, however, it is not a good strategy to hope that the federal or state governments will pass the right legislation and write regulations, which will help you succeed in the next 12 months. Hope may spring eternal, but it is not a good business strategy.
Be wary of generalizations about how the economy is doing: who the winners are and who the losers are or will be. It’s distracting and frankly, it’s filled with conflicting information.
It’s like trying to decide on what is the best way to add 10 years to your life. You would be correct if you said that it depends on whom you ask. A dietician will tell you to focus on good nutrition. A trainer will tell you to exercise and use protein supplements. Some physicians would say hormone therapy. As the adage goes: when all you have is a hammer, the whole world looks like a nail.
Yes, we’ll admit that the economy is showing signs of recovery, but the real question is whether it’s showing signs of recovery for you and your business. To answer this question you need to stop thinking like a small business owner and start thinking that you are running a multi-million dollar enterprise. Why? Because many small business owners tend to think like a small company. And the answer to growth is to think big.
Here Are 7 Questions to Think About and Respond to When Planning for Business Growth:
- Do you have a strategic vision that outlines your business direction for the next 12 to 24 months? And if you have employees, do they know it?
- What is your stated mission (or purpose) statement? How is it communicated to your employees, and how does it help drive business decisions?
- Do you have stated, written and practiced company values to align how you and your employees work together and serve your customers?
- Do you have a branding strategy that promotes how you want to be seen by prospects and clients and articulates your competitive advantage or differentiation from your competitors?
- Do you have standard monthly financial reports to track the financial health of your business and to help drive your decisions?
- Do you have outstanding customer service? If you can’t answer based on your customer’s feedback, loyalty, references and testimonials, your answer is “not yet.”
- Do you have an exit strategy for your business? Every business needs to have a sense of what the end game will look like. It drives growth and helps focus business decisions.
How did you do in answering these questions? Did you have thoughtful and detailed answers for each question? When we talk to small business owners about these questions they often remind us that they are small businesses and not GE, Nordstrom’s or Zappos. And that’s the problem.
We have also seen companies that believe answering questions such as these is a waste of time.
Why Our 7 Vital Questions for Small Business Owners Who Want to Grow Their Business Is NOT a Waste of Time?
A small research oriented company who had been in business for 10 years was modestly successful. They were concerned, however, that although they were able to come up with a strategic plan every year, they were not disciplined enough to implement the tactics required to achieve the plan.
And they really didn’t have to. Business came in and they were comfortable. You have likely heard us reference that success can be your greatest inhibitor to growth. And, the issue for them was that they weren’t growing.
They decided to re-focus their efforts on growth. To do that they:
- Looked deep inside themselves and their business and discovered they were missing a number of ingredients for small business growth success. They uncovered this realization simply by honest answering our seven questions.
- Established company values to guide their work together and in serving their clients
- Created their strategic vision (ideal future state)
- Refined their purpose (or mission) statement
- Identified key strategies and tactics to implement the vision and created accountability by assigning those to lead individuals. Progress on tactics was reviewed quarterly, with general updates given monthly.
- Candidly discussed how they worked together and how work should be distributed to take advantage of each partner’s strengths
- Identified their target market and the market niche
- Created tracking and reporting tools and a process to monitor sales
- Created a financial reporting system, reviewing it monthly and using ratio analysis to do a year over year comparison
- They are embarking on a re-branding strategy
- They are working to identify and develop an exit strategy
They started this initiative in 2008. 2009 was the best financial performance year they had in the company’s 10-year history. 2010 was almost 40% higher than 2009. And note this was accomplished in the worst economic downturn since the Great Depression.
So what really happened? Were they lucky? Were they in the right place at the right time? No – neither of these can explain their growth. What they did was stop thinking small. They stopped behaving like a ‘mom and pop shop’ and decided to focus on growth.
So, we encourage you to take a dispassionate view of your business. Stop listening to the generalities and honestly and thoughtfully respond to your own market-focused questions we suggested. Thinking small will keep you small; thinking big and planning big will lay the path to your growth.
Management Consultants and Business Performance Improvement Specialists Sara Laforest and Tony Kubica have 50+ years of combined experience in helping small and large entrepreneurial businesses accelerate their business growth in record times.