Small Business Talk

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.

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.

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).