SBPM Partners' VP of Relationships Elizabeth Robinson looks at last Month's Investopedia article about the biggest challenges facing small businesses.
Last month, Investopedia looked at the five biggest challenges facing small businesses. It’s an interesting read, confirming what most of us already knew. Despite the various challenges of the early stages of building a company, the thing we all need most is more time.
It may look on the surface as if all the issues listed in Andrew Beattie’s article are very different but, in the end, I’d argue that they are all variations on the same theme – if we don’t protect our time, we are doomed to failure.
The first challenge is Client Dependence. So many early stage organizations are over-reliant on a small number of customers, sometimes even a single customer. This is a precarious position to be in, but the most obvious cause is that leadership are too busy focused on the day to day running of the business to drive its growth. What takes up their time when they should be selling and managing customer relationships? Everything else, that's what.
Let’s look at challenge number two – Money Management. It’s an old and important mantra that cash is king. All growth, delivery and strategy is built on a single foundational truth – if you don’t manage the money properly, it all comes tumbling down. Monitoring the company’s financial position day to day therefore has an enormous potential to impact leadership focus. Again, it’s time taken away from activities to contributing to growth. Because watching the money doesn’t mean there’s going to be more of it.
The third challenge is Fatigue. Entrepreneurs and the people who choose to work for entrepreneurial businesses embrace a culture of hard work. Successful businesses are not built on forty hour weeks. Anyone who’s worked in a start up environment knows that late nights and skipped weekends are inevitable. But just because fatigue and burnout have higher thresholds in this environment, doesn’t mean they can’t be avoided. If you have more time in your day, that’s a date night rescued. That’s another piano recital you can actually be there to see (whether you really want to or not.) There's also an impact on how you'll spend your working time, because we all know you’re not going to make sales calls after a six hour morning shift looking at numbers.
Founder Dependence is fourth on the Investopedia list. Most people think of this in terms of the fabled ‘What if you get hit by a bus?’ question, but there’s much more to it than that. Firstly, if the entrepreneur steering the early stages of the business does get hit by a bus, the business probably is going to fail. To believe otherwise would probably be naïve – it’s hard enough to build the bridge without removing a key stone. But this issue is not just about immediate succession in an emergency. Founder Dependence is evident in the day-to-day for most businesses; it’s a natural overreliance on the person who’s making the decisions. Countless surveys suggest that leaders’ biggest internal issue is getting dragged into things that don’t require input at their level. I’d encourage every CEO to ask themselves ‘Should this meeting really involve the CEO?’ even if you’re still a small outfit, and there’s only four of you in total. Because if that’s the stage you’re at than your CEO is also likely to be your lead sales person and the person with the strongest customer relationships. If they’re in your invoicing meeting – they’re not out landing your next big customer or keeping the current ones happy and profitable. Because what do meetings take? That’s right. Time.
The final issue, as if right on cue for an organization like ours to be blogging about, is Balancing Quality and Growth. As you try to become more profitable, you’re going to want to do more with less. To solve any of the problems that the article talks about, you’re going to need to step away from things if you want to move forward. If you’re going to do that with confidence, you need people who you can trust not to drop any balls while you’re refocusing on growth driving activities.
Investopedia couldn’t have come up with a clearer set of reasons why SBPM exists. Everything we do is designed to address each of these problems, and provide a genuine solution to them. So many of the distractions are about the back office, and how it's managed. We’re giving our customers back this time so they can focus on growth, because ultimately, building your business in the right way is all about time.
The original article was published on Investopedia in April 2022, written by Andrew Beattie, with fact checking by Suzanne Kvilhaug. You'll find it at this URL - https://www.investopedia.com/articles/pf/12/small-business-challenges.asp