How Can You Overcome The Three Primary Issues that Kill Small Businesses?
As my beautiful bride and I walked along Pacific Palisades Park in Santa Monica on a sun-drenched day, she wondered aloud about our upcoming wedding anniversary, “How would you feel about renting a hotel or small cottage for two nights. I’m thinking it needs to be close enough to the ocean where we can hear the waves. I’m really drawn to every part of coastal living right now. Don’t you think that would be a great way to go down memory lane regarding our time together.”
Toni is not a salesperson. The idea of spending even one moment in the business of selling products or services to others would be horrific to her. But the pitch above was masterful, and the close was artful. We all sell all the time. So why do business owners commonly say that they hate to sell?
I would propose that most don’t hate selling. They are perfectly happy to talk to someone about their product or service and see if there’s an opportunity to do business. It isn’t the act of selling that chills the soul. What many dread is the prospecting such as cold calling, selling to strangers who might say no, or following up on initial calls. When you call to ask for the decision the answer might be no or the calls and emails may not ever be returned. In other words, doing the hard things.
Number one on the list of why business owners fail…Nobody is selling. What about number two? It’s related. The owner doesn’t want to do the hard thing, so he or she hires it done. This might be hiring a salesperson, a sales rep agency, a social media lead generation company or any one of a number of ways to avoid the hard aspects of selling. Unfortunately, it is the rare owner who actually becomes expert in managing any of these resources.
You see, it is hard to sales manage others when you don’t know how to sell. It is hard to know which rep group to hire if you haven’t studied how rep groups work. It is hard to evaluate a social media agency if you don’t really get social media. You can spend a huge amount of money in an attempt to generate traffic, leads, or sales with little to show for the effort. Small businesses fail for lack of the necessary capital to overcome the reluctance of the owner to sell and the costs of the learning curve necessary to become proficient with alternative approaches.
If business owners hate to “sell,” they hate accounting even more. Most might not really hate accounting if they had ever taken a course or read a book about business accounting. Regardless of the reasons, most small businesses fail to set up good accounting systems, fail even harder at managing input into the systems they do establish, receive reporting from their accounting systems that is inadequate at best, and have no ability to analyze and make corrections in response to the reporting, because they don’t know how to read the reports.
The comparison here would be that your heart surgeon does surgery with no idea what is happening with your temperature, breathing, blood pressure, pulse, brain function, etc. The second reason that so many small businesses fail is due to the bookkeeping being inadequate. Why? Because the owner doesn’t want to do the hard things.
Hiring, managing, motivating, firing! These are hard things. The government doesn’t help owners love dealing with employees with its endless rules, laws, and meddling with the employer/employee relationship. So just after the owner says he hates selling, and hates accounting, the third verse is: “I hate HR.”
It goes without saying that this is just one more “hard thing” where the owner doesn’t want to take the time to develop expertise. There are countless resources available on how to hire, how to manage, how to motivate, and how to fire an employee. But the reality is that the small business who reaches the size that allows it to hire employees is commonly driven out of business by the bad hiring choices and the ineffectiveness of the employee (s) once hired.
Successful businesses are commonly those where the skills of the owner are so great that they overcome the barriers presented by failings in these three critical areas. For instance, you might have a retailer who is so good at merchandising and choice of location that the customers come and buy even if the sales staff is not that great.
You will see the outstanding lawyer or doctor whose reputation results in referrals and the accounting doesn’t matter, except that the company could be doing so much better if the collection of past due invoices was better.
Or you have the manufacturer who creates a product so compelling that inefficiencies in line and staff positions only reduce profit, they don’t kill the company.
As a consultant and a mastermind facilitator, I have seen hundreds of such companies; those that make it in spite of themselves, and those that fail for these very reasons. What I have seen is that owners who join a mastermind group quickly learn about the places where they are getting in their own way, failing to do the hard things, or on the verge of failure because of issues like the above.
When you surround yourself with peers who have unique business experience, skills, and education, you are going to have individuals within that cadre who will see right through your defenses and into the heart of the matter.
Those peers will care enough to spell it out. As an owner we rarely hear the truth. In fact, we rarely feel safe enough to speak the truth. But in a mastermind group we quickly see that the others in the room get it. They’ve experienced the same fears, roadblocks, regrets, and failings. They’ve been offered opportunities like the ones currently on your radar. They’ve made good and bad choices. They can speak with great authority because they’ve lived it. And they can speak honestly because they have no vested interest in the outcome.
If you live in Southern California and you’d be interested in joining a MasterMind group and enjoying the immense benefits of peer-to-peer learning and accountability, please contact Randy Kirk at 310-910-1848