Small business owners wear many hats and make many decisions each day. Most of these decisions are small and have minor impacts. Some decisions, however, are common to most small businesses and can have far-reaching, fundamental impacts. As a starting point, let’s look at three fundamental challenges:
The first big challenge facing most small business owners is finances. As the CEO of a start-up frequently said to me, “Cash is king.” Businesses exist to make money and most small business owners run their finances without adequate planning or oversight. They monitor bank balances, accounts receivables, and expenses, but most don’t have a basic financial forecasting, reporting, and review structure in place. Additionally, many don’t have the forethought to establish a line of credit or other funding sources to help them remain solvent when inevitable financial speed bumps occur.
If your business needs some help in the financial area, here is a short “best practices” checklist to consider:
- Get help to create a basic financial reporting (KPI) structure, such as within QuickBooks or your chosen accounting software
- Document financial reporting requirements and ensure they are followed by you, your employees, 1099’s, etc.
- Establish a recurring schedule for reviewing results and forecasts for all important financial data, such as cash, revenue, accounts receivable, and major expense categories
- If not yet established, investigate funding options such as a bank/SBA loan, line of credit, credit card, silent investor, or personal funds… before you need the money
The second big challenge facing most small business owners is people because every person is critical to the operation. One poor performer can have unforeseen negative impacts. A sudden resignation by a key contributor can slow production. Finding new talent can be difficult, or motivating and retaining talent can be overlooked.
If your business needs some help in the people area, here are a few ideas to consider:
- Take the time to consider carefully the performance of each member of your current team
- Determine those employees who are critical to your success and what you will do to motivate and retain them
- Determine those employees who are not performing and what actions you will take to address this
The third big challenge facing most small business owners is time. Few seem to have enough of it, even if they are working 60 hours a week or more. After working long hours for years, they begin to feel they have become a slave to their business … that the business is running them rather than they are running the business.
If you are working more hours than you want and not on a track to improving this, here are some ideas to get more of your life back:
- Jot down the actions you take for a day or two, then review your list and decide what you can stop doing with no/minimal impact
- Take a good long look in the mirror and ask yourself “Am I failing to delegate work that others could be doing?”, then delegate appropriately (the topic of a future blog post!)
- Establish more organizational structure in your daily activities, such as a daily “to-do” list and time scheduling for key activities to do daily, weekly, and monthly
- Make a commitment to yourself to reasonable work hours and hold yourself to them, which will motivate you to eliminate or delegate low-value work
Most small business owners I meet have all of these problems, in varying degrees. If you are a business owner who doesn’t have any of these big challenges, it’s possible you are overlooking one or more of them.
Think again. Don’t skip over this opportunity to improve your business and your work/life balance!
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Richard Kirby (www.richardkirby.net) is “The K Factor”, an executive coach who provides inspiration and guidance to small business owners and corporate executives who genuinely seek success at a higher level.
Richard Kirby (www.richardkirby.net) is “The K Factor”, an executive coach who provides inspiration and guidance to small business owners and corporate executives who genuinely seek success at a higher level.
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I landed a new client this week, referred to me by another of our coaches. The client, John, had recently purchased a franchise for an online business. He reached out to us because he’s having trouble generating revenue. John’s an occupational therapist. This is his first experience as an entrepreneur; however, he has the presence of mind to know that he needs help. As we were getting to know one another over the phone I asked about the training he had received from the franchisor. He provided a brief overview but admitted that he wasn’t comfortable with some aspects of the Brand’s training, especially regarding customer acquisition. That revelation gave me a clear direction for our first meeting. There is obviously a disconnect between John’s desire to have a business and his willingness to follow the franchiser’s model for success. To be helpful, I must understand his rationale for acquiring the franchise compared to his personal strengths and interests.
We have advisors and coaches in all facets of life. But in this most important area for our future, for our family and for our retirement, most business owners are pretty much just “winging it”. Oh, they may have an accountant but not much more of a team to focus on exit planning in all its complexities. An advisory team is critical for successful succession planning.
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