The Seven Deadly Sins of Small BusinessMike Adams
Owners and executives must be leaders first and managers second. As leaders our task is first and foremost to be about doing the right things, and the “seven deadly sins,” should be on the top of your list as leadership issues you are dealing with on a regular basis. Building a small business is one of the most rewarding, but risky ventures one could possibly venture into. Most papers on small business deal primarily with financing and risk management, which are only symptoms of the real issues. Your bank account is just the scorecard of how well you have developed your leadership skills relative to accomplishing the “right things.” This paper will help you avoid many of the costly pitfalls of operating a small business, assuming you heed the advice. Avoiding these pitfalls will in turn help you to conserve cash, develop market share, increase sales, improve customer loyalty, increase employee retention and build efficiencies into your operation. The “seven deadly sins” include 1) Poor or non-existent business planning; Business
owners and executives who do not understand them, do not have
experience with them and therefore do not appreciate their impact and
significance often ignore these critical leadership issues. Thirty-five
years of building and operating small businesses has taught me that
most small business problems are not money problems at all, and in fact
money is just an indicator that much deeper issues are at play. Beware;
the market is a wicked taskmaster, these “seven deadly sins” are like
small doses of poison injected into your operation by the very
marketplace you are trying to conquer, and they provide a slow painful
death to the naive. Here are the “seven deadly sins” in order of priority. 1) Poor Business PlanningMost
small businesses do not have even a summary business plan, and of those
that do, many are cookie cutter business plans built with the help of a
piece of software. At a minimum a business plan should have an
executive summary; a company overview with company history and it’s
current status; the companies strategic objective; a description of the
companies products and services; a list of the companies intellectual
properties including patents, copyrights, trademarks, processes and
know-how; a market analysis; a competitive analysis, which includes
competitors and their market position, and their strengths and
weaknesses; a marketing plan, which includes your marketing strategy,
product strategy, sales strategy, and pricing strategy; your customer
service plan; sales projections by product, in units, for at least
three years; and finally a set of financials which include projected
income and balance sheets with a Performa sales forecast. Here are some other important suggestions and facts related to business planning: 2) Lack of Strategic ObjectivesA
business strategy is made up of carefully crafted words making up
templates, which in turn act as filters through which all planning,
tactics and decisions are passed through before implementation. 3) Lack of Marketing Strategies and TacticsMarketing
strategies govern the development of tactics, which in turn provide the
actions items contained within your planning process. The most
important aspect of your marketing plan is the development of promotion
strategies and tactics, which feed your promotion planning and provide
you with sales forecasting data. The promotion plan should also detail
costs and anticipated unit volume so you can set priorities and provide
sales forecasting data. 4) Management in the Place of LeadershipSo
why is leadership so important in growing a business? Because
leadership is about doing the right things, management is about doing
things right . In many ways, it is leadership that will grow your
business from a sales and a stability perspective, and management that
will make, or keep it 5) Poor or non-existent SystemsMost people think of computer systems when they hear the word “system.” But in the since it is used here it means all systems, including the system you use for selecting the right employee, for decision making within a department and so on. One of the more telling statistics in this area is the fact that ninety-four percent of all task or project failures are system failures2. Some of the more common reasons for system failure include: 6) Lack of Development of Leadership StyleDeveloping leadership ability has a lot to do with understanding the type of leadership required at different stages of your company’s development. There are at least six different leadership styles identified to be effective at different stages of a company’s development including; Visionary; Coaching; Affiliative; Democratic; Pacesetting; and Commanding . Understanding which leadership style to employ has
been found to significantly increase the effectiveness, growth and
heath of the companies in which leaders utilized multiple styles. Just
as important is the understanding of what a leaders personal profile
is. Armed with these vital bits of information a leader is equipped to
pursue the right leadership style for the task at hand. 7) Care and Feeding of Sacred CowsI
do not have a statistic on the amount of money, time and energy
expended on the sacred cows lurking in American businesses, but it has
to be staggering. This list details some of the types of sacred cows
you can look for in your business. You could call this business “101,” however, most of
the issues developed in this paper are rarely taught in schools, much
less heeded. These “seven deadly sins” can impede your company’s
ability to successfully navigate through the turbulent waters of
business development. If you do not understand all the issues
summarized in this paper, do the research; find a business advisor to
help you navigate these storms , you owe it to yourself, your business
and the people who count on you. Conquering the devil in the
details is what management is about, concurring the “seven deadly sins
of small business” is what leadership is all about. The beauty of
developing top-level leadership skills is that there is no downside,
only opportunity for growth in both your business and your personal
development. Leadership is what the entrepreneurial spirit is all about. Develop
your business plan, establish strategic objectives, establish marketing
strategies and tactics, lead, build effective systems, utilize more
than one leadership style and kill the sacred cows in your business, it
might be the only thing that keeps you and your company from becoming
another dreadful statistic. |
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