Many small business owners have worked for a larger company at one time or another.
And, in some cases, this is precisely what drove them to go off on their own in the first place.
They just got sick and tired of the - well, let's use an off colored description here - they got sick and tired of the crap that they had to put up with.
They knew they could do a better job, if they were the one calling the shots.
They knew they could be more responsive and generally make themselves, their employees, and their customers happier.
And they knew they could make better money and have more personal freedom in the process.
There are a lot of things big companies say they do, but really don't.
They say they are customer focused - and then they organize the company in the way that is most efficient for them, whether this makes things easier for their customers, or not.
They say they are bottom line oriented - and then they waste untold amounts of money by creating duplication of effort and fiefdoms for individuals.
They say they think about the long term - and then they worry most about how the markets will hammer their stock after the next quarterly earnings release, if they don't meet their target and if they invest too much for the long term.
And worst of all, virtually every large company says in one way or another that their employees are their most important asset - but anyone who has worked for most large companies knows that these are just words.
The problem is, when many small business owners walked away from the large company they were part of, they walked away from some of the good stuff too - and maybe even stuff they didn't know they were supposed to be doing in the first place.
They had a skill, or perhaps more than one, that let them start their own business; but they didn't have a good enough grasp of the "big picture" and all of the disciplines that have to be put together to be successful.
That, more than anything, is why so many small businesses don't make it.
That's why 90% of small businesses don't make it into the second generation and another 90% of those that do, never make it to the third.
Then the problem is compounded because small businesses just don't have the resources and the infrastructure to do everything that they might like to do.
So, they quite naturally cut a few corners and improvise.
Some of the improvisation is necessary and beneficial.
Why go off on your own and then do things the same way as what you left? But, it doesn't take long for most new business owners to realize the magnitude of their undertaking and that they don't have all the tools they need.
And let's face one final fact.
When we do succeed, we often times develop a bit of an attitude.
We "made it," we "did it our way," and we "showed 'em.
" There is, quite naturally, a little more swagger in our step and maybe even a little chip on our shoulder.
We found the right formula and we made things work.
Why should we even think about messing with success? We are "there" and we don't need to change.
Let's think a little more about all this for a minute.
Whether yo''re still struggling, or you're long past that stage, there are a few concepts that big companies consistently employ that have merit and that you should think about borrowing.
They may not do everything right, but if we can integrate a few of their concepts and approaches into our businesses, without adding the bureaucracy that usually characterizes bigger companies, the benefit is ours - without the baggage.
One of the differences between big companies and smaller ones is that the big guys make things more complicated than they need to be.
When competing egos become involved, it sometimes seems as though the more complicated you can make a simple concept, the smarter you appear to be.
That's not what I'm getting at - you left the corporate egos behind and there's no-one to impress.
But you still have a business to run and you might as well do it right.
Mostly it's just a thought process; you don't have to jump through hoops, but you do need to think things through.
First, build an ongoing strategic and business planning process into your business.
The key word here is ongoing.
Bigger companies go through an annual ritual of filling out forms that often don't address the real issues and call this strategic planning.
Those participating in the process are frustrated, because they see what really needs to be done and also see that company politics, inertia, protectionism, and the fear of unknown risks get in the way.
So, bigger companies might not do it right; but at least they imbed strategic planning in the culture of the company.
Things do change.
We don't live in a static world and we need to have a process that lets us see when that change can have an impact on us.
It's not about the process - it's about the results.
Take a lesson from bigger companies and put a process in place.
But, make the process ongoing and devise a way for you and your people to focus on strategic planning consistently, with small steps along the way that get at the real issues and the best solutions.
Keep going back to your business model and how you make money.
Make certain you are doing the best possible job of either focusing your strategy on what you do best, or making the necessary changes to ensure your success.
Second, discipline your business to think about the numbers.
It's too easy to tell yourself that you're not a "numbers person" and ignore some of the warning signs that stare you in the face from time to time.
Big companies are paranoid and they insist on having early warning systems that tell them when things are going in the wrong direction.
A small business absolutely has to have the same thing.
That doesn't mean being a slave to the numbers and putting them together for their own sake.
It means identifying those few things that drive the success of your company, religiously tracking them, and, most important, communicating them throughout the company and making sure everyone follows them.
It means understanding the return you expect from every investment you make.
It means knowing how much money you make from individual customers, or groups of customers.
It means knowing why you price the way you do and what impact pricing alternatives could have.
It means calculating the financial best case / worst case scenario for key decisions you make.
Third, recognize that there is a difference between income and creating value.
Bigger companies are attentive - sometimes too much so - to their stock price and how the markets value them.
Your stock may not trade in the marketplace, but you have to focus on building company value, too.
Think in terms of someday selling your business.
What is the buyer going to pay for? Is your business improving? Can your business grow? Can you demonstrate, or "prove" why to a potential buyer? Remember, all of the income you take home doesn't necessarily reflect value.
It reflects your job and what you pay yourself to do it.
That's not necessarily the same thing as value and people are not inclined to pay you as much for it as you might think.
Finally, like bigger companies, say that your employees are your most important asset - and mean every word of it.
Because you are small and adaptive and can react more quickly, you don't have the H.
R.
baggage that a bigger company has.
But, you also don't have their deep pockets and you can't afford to let this one slip by you.
People need an income to eat, but their enthusiasm for going to work every day comes from being part of something and feeling as though they contribute.
Take advantage of human nature.
Say and mean the same things that bigger companies say - just don't do things the way they do them.
Big companies like to think they are sophisticated - and some are.
Some small businesses chafe at that word.
But, there are two parts of sophistication - employing the tools that make a difference and give a business real competitive advantage and keeping things simple enough to make them actionable and meaningful.
Bigger companies emphasize the first part - and those are the tricks you need to borrow.
Small businesses too often emphasize the second part and ignore the first.
Don't be one of them!
And, in some cases, this is precisely what drove them to go off on their own in the first place.
They just got sick and tired of the - well, let's use an off colored description here - they got sick and tired of the crap that they had to put up with.
They knew they could do a better job, if they were the one calling the shots.
They knew they could be more responsive and generally make themselves, their employees, and their customers happier.
And they knew they could make better money and have more personal freedom in the process.
There are a lot of things big companies say they do, but really don't.
They say they are customer focused - and then they organize the company in the way that is most efficient for them, whether this makes things easier for their customers, or not.
They say they are bottom line oriented - and then they waste untold amounts of money by creating duplication of effort and fiefdoms for individuals.
They say they think about the long term - and then they worry most about how the markets will hammer their stock after the next quarterly earnings release, if they don't meet their target and if they invest too much for the long term.
And worst of all, virtually every large company says in one way or another that their employees are their most important asset - but anyone who has worked for most large companies knows that these are just words.
The problem is, when many small business owners walked away from the large company they were part of, they walked away from some of the good stuff too - and maybe even stuff they didn't know they were supposed to be doing in the first place.
They had a skill, or perhaps more than one, that let them start their own business; but they didn't have a good enough grasp of the "big picture" and all of the disciplines that have to be put together to be successful.
That, more than anything, is why so many small businesses don't make it.
That's why 90% of small businesses don't make it into the second generation and another 90% of those that do, never make it to the third.
Then the problem is compounded because small businesses just don't have the resources and the infrastructure to do everything that they might like to do.
So, they quite naturally cut a few corners and improvise.
Some of the improvisation is necessary and beneficial.
Why go off on your own and then do things the same way as what you left? But, it doesn't take long for most new business owners to realize the magnitude of their undertaking and that they don't have all the tools they need.
And let's face one final fact.
When we do succeed, we often times develop a bit of an attitude.
We "made it," we "did it our way," and we "showed 'em.
" There is, quite naturally, a little more swagger in our step and maybe even a little chip on our shoulder.
We found the right formula and we made things work.
Why should we even think about messing with success? We are "there" and we don't need to change.
Let's think a little more about all this for a minute.
Whether yo''re still struggling, or you're long past that stage, there are a few concepts that big companies consistently employ that have merit and that you should think about borrowing.
They may not do everything right, but if we can integrate a few of their concepts and approaches into our businesses, without adding the bureaucracy that usually characterizes bigger companies, the benefit is ours - without the baggage.
One of the differences between big companies and smaller ones is that the big guys make things more complicated than they need to be.
When competing egos become involved, it sometimes seems as though the more complicated you can make a simple concept, the smarter you appear to be.
That's not what I'm getting at - you left the corporate egos behind and there's no-one to impress.
But you still have a business to run and you might as well do it right.
Mostly it's just a thought process; you don't have to jump through hoops, but you do need to think things through.
First, build an ongoing strategic and business planning process into your business.
The key word here is ongoing.
Bigger companies go through an annual ritual of filling out forms that often don't address the real issues and call this strategic planning.
Those participating in the process are frustrated, because they see what really needs to be done and also see that company politics, inertia, protectionism, and the fear of unknown risks get in the way.
So, bigger companies might not do it right; but at least they imbed strategic planning in the culture of the company.
Things do change.
We don't live in a static world and we need to have a process that lets us see when that change can have an impact on us.
It's not about the process - it's about the results.
Take a lesson from bigger companies and put a process in place.
But, make the process ongoing and devise a way for you and your people to focus on strategic planning consistently, with small steps along the way that get at the real issues and the best solutions.
Keep going back to your business model and how you make money.
Make certain you are doing the best possible job of either focusing your strategy on what you do best, or making the necessary changes to ensure your success.
Second, discipline your business to think about the numbers.
It's too easy to tell yourself that you're not a "numbers person" and ignore some of the warning signs that stare you in the face from time to time.
Big companies are paranoid and they insist on having early warning systems that tell them when things are going in the wrong direction.
A small business absolutely has to have the same thing.
That doesn't mean being a slave to the numbers and putting them together for their own sake.
It means identifying those few things that drive the success of your company, religiously tracking them, and, most important, communicating them throughout the company and making sure everyone follows them.
It means understanding the return you expect from every investment you make.
It means knowing how much money you make from individual customers, or groups of customers.
It means knowing why you price the way you do and what impact pricing alternatives could have.
It means calculating the financial best case / worst case scenario for key decisions you make.
Third, recognize that there is a difference between income and creating value.
Bigger companies are attentive - sometimes too much so - to their stock price and how the markets value them.
Your stock may not trade in the marketplace, but you have to focus on building company value, too.
Think in terms of someday selling your business.
What is the buyer going to pay for? Is your business improving? Can your business grow? Can you demonstrate, or "prove" why to a potential buyer? Remember, all of the income you take home doesn't necessarily reflect value.
It reflects your job and what you pay yourself to do it.
That's not necessarily the same thing as value and people are not inclined to pay you as much for it as you might think.
Finally, like bigger companies, say that your employees are your most important asset - and mean every word of it.
Because you are small and adaptive and can react more quickly, you don't have the H.
R.
baggage that a bigger company has.
But, you also don't have their deep pockets and you can't afford to let this one slip by you.
People need an income to eat, but their enthusiasm for going to work every day comes from being part of something and feeling as though they contribute.
Take advantage of human nature.
Say and mean the same things that bigger companies say - just don't do things the way they do them.
Big companies like to think they are sophisticated - and some are.
Some small businesses chafe at that word.
But, there are two parts of sophistication - employing the tools that make a difference and give a business real competitive advantage and keeping things simple enough to make them actionable and meaningful.
Bigger companies emphasize the first part - and those are the tricks you need to borrow.
Small businesses too often emphasize the second part and ignore the first.
Don't be one of them!
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