Small Business Talk

In doing some research for an upcoming book on small business I came across an abstract of an interesting study about microbusinesses (teeny, or one person businesses), and the degree to which people owning or running them actually have specific goals, and the degree to which they are concerned with growth, or even money and profit maximization. Iève reproduced the abstract below and the link to the page where the entire report can be purchased.

Contends that micro-business owner-managers invariably have objectives, although they do not always make them explicit. These objectives tend to relate to personal rather than business criteria. In addition, the vast majority of micro-business owner-managers indicate little inclination to maximise profit or pursue growth. The supposed non-existence and ambiguity of objectives amongst owner-managers probably arise because they often subconsciously set objectives, rather than make them explicit as part of a written business plan. In practice, micro-businesses generally pursue a number of economic and non-economic objectives relating to factors such as income levels, job satisfaction, working hours, control and flexibility. These objectives were derived from the influence of the micro-business owner-manager’s individual, social and economic contexts. Moreover, the behaviour of owner-managers is most appropriately characterised in terms of satisficing behaviour. The impact of this is very important, because it means that there is often no drive to improve the business in terms of growth, sales and profitability. Furthermore, the willingness of owner-managers to alter their aspiration levels, if objectives were not being easily achieved, often means that they do not initiate changes in the way they run their business when perhaps they should.

http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=3F6A59B9CF045BC0204114D360A7ACE7?contentType=Article&hdAction=lnkhtml&contentId=872083

It’s long been bandied about by a lot of very educated people that the Chinese ideogram for crisis is composed of two symbols -  one for danger and one for opportunity. Consultants, trainers, authors and supposed experts have been “championing” the “Chinese perspective” on danger and change based on this conclusion.

Except there is a lot of evidence that it’s simply wrong. Of course there may be differences of opinion on such things, but here’s some information on the topic:

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Today Bacal & Associates unveiled its brand new low cost display designed specifically for small business in Canada. Designed to take the place of conventional presentation devices, this “whiteboard” or, as Bacal calls it the Canadian Snowboard, can be used in business presentations, has zero cost, and is completely flexible.

It can be used to model and sculpt, can be written upon, moved, carted, used in play and thrown, and is also useful for sliding, and burying. Use is limited only by your imagination.

In the picture to the right, Robert can be seen using the snowboard in a presentation for the local city council. Note carefully the snowboard tool to his left, and how well the board functions to hide the Ford Focus to his right.

Editor’s note: One of the competitive advantages small businesses have is agility — the ability to act quickly on creative ideas. This is an example of how quickly a product can come to market. Robert’s inspiration was the fact that 2007-2008 brought about an almost record abundance of the raw materials that go into this product. In March, 2008, Robert sat down to figure out a way to monetize the abundance, and the rest is history.

I just wanted to pass on this source for guides about ebusiness, and using the Internet as part of your e-business strategy. The site appears to be partly funded by the Province of Saskatchewan and presents 30+ guides on all aspects of ebusiness from building a website to dealing with fraud in ecommerce.

There’s too much stuff to summarize, but if you are interested, click here.

It’s understandable that a small business owner, faced with the need to make a living and put food on the table, may want to use a shotgun approach to selecting services and/or products on which to base the business. This is particularly prevalent in some service oriented professions, like business and human resource consulting, organizational development and training fields. Let me share an example.

Some time ago a organizational development and training consultant I worked (both employed by same employer) was downsized. This was a year or two after I had left the employer. We had some discussions about work, since both of us ended up as independents.

In looking at his promotional material, which was quite slick and glossy in look and feel, one thing came across to me as a bit of a mystery. He was offering a grab bag of services to potential clients — a shotgun approach. However, I knew from working and talking with him that for many of those services he was neither experienced or competent to deliver them.

My opinions, of course, can be wrong, but in this case I received several calls from the “client community” querying me on this exact issue and this consultant. They wanted to know what I thought of his expertise (I don’t really answer those questions directly), but the common thread was “How can he be good at all those things”? Or, “Has he ever done these things before?”

His demeanor and materials were such that prospective clients wouldn’t go to him to ask directly because they believed that he was so desperate for business (which he was) that he would lie. The didn’t trust him. And thus, they didn’ t hire him either.

The results were decidedly unfortunate and sad. He went from independent consultant to getting another job, losing it or leaving for some reason, trying to consult, and back and forth, always desperate. In the process his wife of only a few years filed for divorce and he lost his house. Of course there were other contributors to this meltdown — major ones, in fact, but the desperation and the lack of an understanding of his marketplace made it pretty much impossible for his business to succeed.

So, simply: Don’t Do This!

No doubt you’ve heard someone — even a highly educated someone, expound about the failure rates for small business. Some say that 90% of small businesses will fail in the first 5 years. Others use the 60% failure in the first three years.

In fact, you can pretty much find any old numbers to support any dire predictions. But mostly it’s all wrong. It’s pretty much unreliable.

Which is really good news if you are looking at opening a small business. The failure (as in horrible, disastrous failures) isn’t as high as you have been told. And, we don’t exactly know what the failure rate is, and it’s likely to fluctuate considerably depending on economic conditions.

Here’s the simple reason. It’s definitional. While there are studies all over the place about business failure, how business failure is defined varies from place to place, and often it includes businesses that have been sold (even for large profits), or closed due to death, or family issues, or a number of other reasons.

So, it may be true that x percent of small businesses close within x years of starting, but we do not know WHY they closed, or whether they “failed” or not.

Running a successful small business is difficult, but if you feel you have the vocation and have the skills and desire, don’t let the numbers discourage you. Since the numbers, at leat in this case, simply don’t mean much without knowing HOW the numbers have been calculated and exatly what the numbers mean.

Many small business miss out on the opportunities to use low cost promotional items (e.g. imprinted itemts) to promote and market their businesses, and build brand visibility and identity. Many of us know little about how to do this, or we don’t even consider this as an option.

If you would like to learn more about the use of promotional items you can apply to receive a free subscription to Successful Promotions. Here’s the brief summary:

Successful Promotions shows you how effective imprinted promotional items can be for any kind of campaign. Planning an event or meeting…learn about travel destinations and incentives items that motivate. Whether you want to attract or reward talented employees, thank loyal clients, find new prospects or tout your new products and services, Successful Promotions can help with true-life case histories, usable marketing strategies and showcases of proven promotional products nine times per year.

There are various critical decision points in the life of a small business, and each one can push a business to the next level, or cripple it, depending on the decision made.

One of these decisions has to do with whether one decides to expand an existing business, or to maintain an equilibrium.

As a small business owner you will find that there are several “levels” of size that vary a lot from each other, even though the leap from one to the next seems small.

For example, moving from a sole proprietorship without having any employees to the next level, which is having at least one or more employees is a huge jump, because the skills needed to run a business with employees is quite different than those required to make a sole proprietership work if it has no employees.

Then, moving from a business with one or two employees to one employing more employees than you can reasonably manage or supervisor is the next leap. Once again, the skills you need to do this are quite different than the previous two levels.

The decision to grow your business (growing in the sense of adding personnel) is one that needs to take into account:

• your current skills
• your desire to develop your skill
• your tolerance of financial risk (expansion increases risk)
• your lifestyle preferences (owning a growing or larger business results in a rather different lifestyle than running a one person shop).

Small businesses tend to build websites without really following a set of sensible “thought-exercises” that will ensure sucess, which is one reason why most small business websites fail miserably.

One neglected aspect is the Unique Value Proposition that your website will or does offer visitors. This should be established early on, before any website coding is done, and it unique value proposition should reflect a need on the part of your market or potential visitor pool.

For example, this site is based on several different UVP’s, one of which is based on the potential visitor’s problem of finding good reputable, no bull, semi non commercial information about small business that isn’t, in effect spam, and is also available at no charge. Hence we are building two human reviewed directories so visitors don’t have to wade through machine generated junk from search engines.

So, first things first, which is that when planning for your small business website, always start with how you will fulfil some visitor need in your target market. Of course, there’s much more, and we’ll cover more topics soon.

We’ve built a number of websites for our small business, and it may be immodest but a number of our sites (not all) have been extremely successful in a number of ways.

This site (smallbusiness411.org) is, of course, in the process of being built, so I decided to share with readers the thinking, and actions that go into what presumably will be another successful site. We’ll chronicle our thinking, goals, purposes and so on, and explain our decisions as we go.