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Are You Running Your Business Or Is Your Business Running You?

Why small businesses get bogged down and what you can do to break free.

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Why small businesses get bogged down and what you can do to break free.

Opinions

Are You Running Your Business Or Is Your Business Running You?

Why small businesses get bogged down and what you can do to break free.

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When you look at the stats, starting a business isn’t for the feint-hearted. It’s broadly accepted that around 30% of businesses will fail in their first year.

It takes a huge amount of resourcefulness and creativity to get going and then stay in the 70%. And it can be very hard to grow to the heights of £1m revenue, let alone scale to £5m.

Speaking to many entrepreneurs there’s a common thread as to why hitting £1m will never happen. It boils down to the company running the founder, rather than the founder running the business.

What do I mean?

If you’re going to start a business, you do it because you are passionate about it. You have to love what you do to make leaving the security of a job worthwhile.

That passion is a major advantage. However, it’s when you’ve got stuck into trading that your mettle is really tested – you soon realise that you have to do many more things than you had originally anticipated and a large number are things you don’t enjoy.

Things like tax, lead generation, keeping customers happy, supplier contracts, accounts, employee benefits. The list keeps on growing.

It can soon be a juggle to balance time on what you love with what’s essential. And in my experience, this is where things start to go wrong and the business will start to run you.

Sometimes it’s very subtle – letting a small thing you don’t want to do slip one day, and promising to catch up on it another. But by giving yourself permission to do this you’re becoming comfortable about letting things slip. Things compound and you can get so far behind that catching up isn’t a possibility.

Worst case scenario, you find yourself reacting to the latest crisis in the business, working long hours to stand still, and constantly worried about having enough cash to pay staff and the bills.

What’s more there’s no time left to spend with the family or on yourself. That can feel like an epic fail as for most people being your own boss is all about providing for your family and having the flexibility to do other things.

So what's happening?

For starters, we all go into business with a level of knowledge, skills and experience that get us so far.

Let’s say you have a passion for surfing and the public heightened opinion on environmental issues leads you to create an affordable eco surfboard. You know what surfers want and you create a product they’ll love. But will your background as an insurance broker help you get the product into market and grow the business?

Yes and no – Yes you have the immediate surfing network to launch and get customers buying. And then no, because you don’t have the sales or marketing experience to export beyond this pool so you can truly grow your passion into a sustainable business. Nor may you have the experience of recruiting people, dealing with the complex environment legislation of other countries, or international brand marketing.

And that’s where things start to run out of control. Eventually, you reach a point where you are operating beyond your current ability. The more people you have involved, the more HR related matters there are to address, the more customers you have the more suppliers you rely on, and the more complex the cash flow becomes and so on.

What's the solution?

If you step back, there will have been a time when you were motoring along and things were working well. Generally that period of time will reflect the skills you have – your growth will have been the direct result of using existing knowledge, and doing the things you know how to do.

The phase you are in now, involves things you have no experience or knowledge of. It’s this knowledge and skills gap that restricts your ability to perform and inhibits company growth. In short, in order to grow the business again you have to grow too.

Having control of your business and scaling it rests on your ability to focus on what is important and set the right direction for a team of people who have the skills to do the things that don’t come naturally to you. It’s about getting people from ordinary to extraordinary and that starts with you.

So how do you do it?

Firstly you have to understand the difference between knowledge and skill and work out your strengths and weaknesses.

There are lots of sources of knowledge - training courses, books, podcasts, friends - but gaining knowledge does not develop new skills. Gaining new skills requires that you take that knowledge, apply it, get feedback, learn from that feedback and then try again.

So if you want to improve your tennis backhand you can read about it, watch a YouTube video and then go and try it on a tennis court. If it works great, but if it doesn't what then? If you are serious, you hire a tennis coach to provide knowledge, feedback and keep you committed to practising.

So how can you apply this to your business so you turn the tide and run it, rather than it run you?

1. Consider what's time consuming and preventing you from achieving goals.

Is it time to get a chartered accountant with experience of scaling up involved in your accounts? Or do you need to get a specialist marketing agency involved who will achieve more with less? These sorts of questions will help you work out what skill is core to your business, and you as a leader.

2. Be honest.

Focus on your skills as a leader, manager and influencer. In my experience, this is the most difficult area of personal development. But if you are honest about what it will take to move your business on then you will either commit to changing yourself or seek out others with the experience to do it for you.

3. Acquire knowledge.

When you know what skills you will focus on then you need to find good sources of knowledge to help you improve, practise, gain feedback, adjust and then practise some more. It’s an important investment in the future, even if it feels like a big commitment you should do it.

3. Be selective.

Don’t go down the road of consuming everything. Instead, build a peer group that you trust, and take recommendations on books and training courses. Seek out specialist incubators and growth programmes like the University of Hertfordshire Incubator or the London & Partners Business Growth Programme.

4. Practise using your knowledge and get feedback.

Be open with your team about what you are doing and why. Everyone wants to be part of successful scaling business and will feel braver about learning and changing themselves if they understand the value they are creating. They’ll be honest in return and you’ll get feedback that will help you adjust and improve.

5. Get support.

You don’t have to go it alone. It can be daunting so a coach or mentor can help you make the decisions and then hold you to account, and determine how you develop in response to feedback.

Developing strong leadership skills will create a strong foundation for scaling-up your business. Remember that as you scale-up and the number of people and relationships involved rises you’ll need to re-evaluate skills again so you continue to grow successfully. Sustaining performance is the business leader’s greatest challenge but with this approach to continuous development you can win.

Jon Kandiah is the Scale up Strategist.

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Are You Running Your Business Or Is Your Business Running You?

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