Solutions to Four Common Issues Plaguing Business Owners
June 23, 2017
CONNSTEP’s Manager of Growth and Innovation Services, Mark Paggioli, has been reviewing industry articles and business data for the last several years. In doing so, he has uncovered recurring universal issues that continue to challenge business owners to this day.
His analysis has uncovered four common issues that resonate in today’s business climate. In identifying these, Paggioli clarified these underlying pain points while providing some solutions to them:
1. Reactive vs. Proactive
The lack of processes or inefficient ones can have more of a significant impact on customers than the delivery of a poor product. Communication between a business owner and the leadership team can be compromised by daily work challenges, lack of communication, not adhering to a budget and written policies/procedures can contribute to repeated mistakes, rework and delayed learning curves.
What You Can Do: Look ahead in your business with a preventative maintenance approach. It’s easy to become consumed by working IN your business, but consistently working in instead of ON the business can work against you. You could find yourself missing out on opportunities, current trends in the marketplace, and much more if you’re so caught up with attending to present items that you don’t look far enough up the road toward the future. As the leader and chief visionary of your organization, your time is best spent working in “ON” mode.
When you’re working ON the business, you’re deliberately and proactively taking strategic initiatives to move your organization forward. You’re always focused on what you need to be doing in terms of your business’s capabilities and competencies – looking inward to assess your value and outward at risks, threats, and customer issues that need to be addressed. You aim to capitalize on opportunities by plotting a course and applying your resources strategically.
When you’re NOT working on the business, you’re reactive and there’s a high likelihood that you’re spending resources on areas that don’t further the organization over the long haul. Neglecting activities that enhance sustainable business can have a negative effect on the value of an organization, and can take away from value others perceive when evaluating your business for potential purchase.
One of the most common challenges that business owners face is that they oftentimes handle everything from running and maintaining the shop floor to managing the organization’s books to leading sales and marketing efforts. This is all too common an issue – and stems from the fact that, in many cases, it may have been a “necessary evil” to wear any number of different hats to start one’s own business and keep it running. For many leaders, shifting from “lead firefighter” to a more strategically-focused role can bring some discomfort, as the latter may be a completely foreign mindset for some. But it is crucial to the success of your business that you eliminate operating by learned habits and focus on the actions needed to elevate your organization to the next level.
What You Can Do: Reviewing job descriptions for a company’s CEO can be a quick and easy way to assess how you are spending your time and if you’re spending enough time working on the strategic needs of the business versus working on the day to day operations. It’s important to distinguish these roles versus a business owner. Being mindful to work on the business offers opportunities for you to create a plan that includes sales forecasting, market trends, finances, workforce talent, technology needs and other key elements so they become proactive versus reactive measures. When you’re ready to run with it, be sure to communicate it so others within the organization can refer to it. This allows you to reconnect the business processes and the people they are intended to serve. In doing so, don’t be afraid to make it your company mantra. In the words of The Table Group’s Patrick Lencioni, “Healthy organizations align their employees by repetitively and comprehensively communicating all aspects of organizational clarity.”
You feel you have reached a level of success and are financially comfortable. Now what? Are you trapped in the “safe zone”? Be cautious of complacency, the number one cause of death for a business!
Often times, our problem-solving radar dims and we assume if there isn’t an immediate problem, then there isn’t a need to make a change or improvement. This further dims the innovation lightbulb leaving a company to become stale. It takes resources including time, energy and dollars to change habits, culture, morale and processes. It can be risky to try something new but the, “If it ain’t broke, don’t fix it” mentality can be detrimental. After achieving a certain level of success and comfort running your business, it is most definitely possible to become too comfortable! Comfort isn’t bad, but the “safe zone” can entrap business owners.
What You Can Do: Say “no” to being satisfied with the status quo and make a conscious effort to go beyond what is required. Think about your competition who is constantly elevating their performance to do better, to satisfy a need and to increase the value they bring. This allows for better protection of product offerings, the ability to gain more market and to hold onto better margin. This applies on a local, national and global level. Ask yourself, “Am I sitting still?” and “Am I progressing and making headway or am I stuck?” The first step is simply to understand what it means to be complacent and to face it head on.
If so, take the time to review the company mission, vision objectives and strategies and their connectivity. Reach out to seasoned professionals who can help you assess where you are at and challenge you. Once you decide on the changes, write them into your business plan so you can see them through.
4. Financial Instability
Striving for financial freedom can also bring business owners financial hardship. Instability – or chronic cash flow problems – seems to loom frequently and in various forms. It can mean cash deficiencies, lack of profitability, insolvency or any combination of these elements. The one phenomenon that rings true is that there isn’t one sole cause of poor financial performance. The results include low profitability, liquidity or solvency with efficiency, scale and debt structure.
What You Can Do: Identify the potential causes and types of problems your business is suffering from. Take a closer look at your income statements, cash flows and balance sheets but, if you’re wearing too many hats – owner, operator, CEO, bookkeeper – the challenge can be overwhelming. If you’re a small company that doesn’t need or can’t maintain a full-time accounting employee, there are alternatives such as a B2BCFO.
· Creating a budget and use it
· Establishing financial goals and integrate them into your forecasting budget
· Examining ways to reduce your debt
Problem solving within any business takes a sense of clarity, a mindset for change and the desire to continuously move forward. Knowing when to acknowledge a problem and applying best practices will pave the way toward resolution.
Feeling like you’re still working in the business and not on the business? Not progressing or feel like you’re sitting still? CONNSTEP is here to help.
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