I own and have owned many businesses in my life. Some were failures, but many were successes. After thirty years of diligently practicing this game we call business, patterns begin to emerge. When looking back, it is easy to see what I did right and what things I did that were downright stupid. I can state without any hesitation that every successful business I wound up with were successful because eventually systems were created and implemented. Based on that, I would argue until the sun goes down that if you want your small business to really be successful you need to start creating, documenting and implementing systems.
Keep in mind I always distinguish between being self-employed and being a small business owner. Neither one is necessarily better than the other. If your desire is to keep everything simple, never hire more than one or two people and to always be the main producer or service man, then being self-employed is a much less stressful way to go. But as a small business owner, the business will take on a life of its own. Like a child it needs rules to regulate how it acts or before you know it, the spoiled child will take you down, hard! Systems are the rules for your child.
Running to catch up, but never quite getting there.
As small business owners, we all know what it is like to lie in bed at night or get up early in the morning to add to our list of all the projects that we want or feel we need to accomplish that day. If you are an optimist you will often think, “Today is the day I get a lot of things done on my list, then I can take a day to relax”. But by the end of the day, you feel like you are further behind then when you started.
It is a common issue with small businesses owners and even CEOs of large corporations. The sad fact is, if you are running a business there will always be more than enough to do. There really is only one way to get a handle on this problem that can lead to burn out and even depression. Learn to decide every day what the one thing is you want to accomplish before the day is over. What is the one thing that will move your business just a little closer to your goal? It is a mental game that you must learn to play by yourself every morning and ask yourself the following question. “If I could only accomplish one thing today, what would it be?” (read more about focus)
Yes, it is important to keep that priority list and naturally you will continue to add to that list. But, if you only have one thing to complete, anything else that gets done is simply icing on the cake.
For a Clue as to How to Weather the Storm, Look at Those Who Have
Almost every business feels it when the economy takes a down turn and we all hear the little voice that says, “what if ?” But taking a cue from those companies that have sailed through the Tsunamis, not just once but many times, just may hold the key to your survival.
Kimberly-Clark, Philip Morris, Walgreen’s, Kroger, Gillette, Abbot Laboratories, Wells Fargo, Pitney Bowes, Wal-Mart and Walt Disney are only a few companies that have sustained growth through good times and bad over the last fifty to more than 100 years.
They all became and were known as the best at something.
They all focused on hiring good people and then not micro-managing these people.
They all had very specific goals for the company and everyone knew those goals by heart.
They all had core values that went beyond just making money.
Every decision that these companies made were determined by their goals and their core values.
When times get tough, it may be more important than ever to find something in which your business can become known as the best.
Simple Small Business will, from time to time, review a business book that we think is worthy of your consideration. I think that it is only fair to warn you that I have spent most of my adult life studying business related books and I find that over time I am drawn to Biographies and Case Studies rather than non-fiction, strategic or instructional types of books. When you are first beginning the journey of entrepreneurship, instructional books are necessary because we lack a foundation of solid technical knowledge. After the framework has been developed, we will need guidance from someone with more experience. This guidance comes from actually listening to people who have done it. Understanding their struggles and how they overcame them can be extremely enlightening.
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“Four Seasons” is a book written by Isadore Sharp, the founder and CEO of the highly regarded Four Seasons Hotels. It is a forty year summary of his life and the evolution of the Four Seasons name.
In the introduction he begins by humbly admitting that when he started he knew nothing of the hotel business or any small business for that matter. His parents were poor immigrants from Poland and Isadore spent some time explaining how his family arrived in Canada and how his father wound up in the building trade. This was during the depression and as a small boy he would spend the day helping his father by carrying bricks or plaster, digging ditches and putting in a good hard days work. It becomes obvious that Isadore’s values came from his upbringing and it is important in understanding his philosophy in his dealings with businesses and with people today.
I read a story about Ray Crock, the founder of McDonald’s (in the book “Focus”). Mr. Crock was with a bunch of young business college students one day when Ray asked them what business he was in. They said the hamburger business. He said “no, real estate. McDonald’s owns more valuable real estate than anyone else in America. Hamburgers were just a reason to own the real estate”.
Another question I read was how many people think that they could make a better hamburger than McDonald’s. Almost everyone raised their hand. Then, the speaker asked, then why aren’t you rich? It is because it is not about making the best burger. It is about perception, trust, speed, cost and other factors. It took me a long time to come to some simple facts of life and manage a simple small business. Sometimes the simplest things are the hardest to understand. Humans naturally want to think that everything is too complex. For example, the most powerful way to be successful is to know what you want. The problem is that most people don’t really know what they want and what they are willing to do to get it.
Summary: Go to the portable applications website and download their free portable apps suite plus any other programs that you may need to run your business. Stick them on a 4 or 8 gigabyte thumb-drive and run your entire business from any computer anywhere, any time. Save a ton of money and feel secure that no lost or stolen computer, computer crash or disaster will bring your simple small business to a halt.
I am a big fan of portable applications. If you are not aware of what that is, portable applications are small programs that reside entirely on your USB thumb-drive. These are the programs that you use every day on your computer like word documents, spreadsheets, graphic programs, etc. They take up no space on your hard drive, they don’t fill your computer with a bunch of garbage that slows your computer down and the icing on the cake is that most of these are open source and completely free.
To become familiar with what is available I highly recommend that you take a jump over to portable apps to see what they offer. There are other portable apps available from different sources, but this is a great place to get started. Imagine being able to run your whole simple small business using the thumb-drive on your key chain or in your pocket. If your computer crashes, quickly buy or borrow another computer and in minutes you are up and running. Someone breaks in and steals your equipment or a fire destroys your office, no problem, you have got it covered. You are on vacation and there is an unexpected business emergency, use the hotel computer and jump in and get your company back on track.
Regardless of what simple small business you are in, you MUST be a seed planter! Planting seeds is basically laying the groundwork for future business. EVERY business must do this. Most of the time the seeds that you are planting today will not bring any fruit until six months or a year from now. So you must be continuously planting seeds.
There are two common problems that simple small businesses have with seed planting. First, when you are planting seeds you are not bringing in any income to pay the bills. Cash flow is the blood that keeps a small business alive. Oftentimes, a simple business is a one or two person operation. The second problem is just the reverse of the first. If the entrepreneur is busy generating income, then they are not planting seeds.
This is the catch 22 that destroys most small businesses and the worst thing is, like a silent deadly disease, the entrepreneur never even knows that it is at work in the organization until it is too late.
In the previous article I mentioned that it is imperative that you find help with two of the Basic Pillars while you focus on only the third (it does not matter which one). As your small business grows you can and should take the liberty to break each of the Pillars down into their sub-columns assigning someone different to each area. You can slowly do this as your business grows, delegating or farming out one sub-column at a time over time. Pillar 1 – Create the Work: Columns
Develop the Product (R & D and Market Research)
Develop the Production System (Purchasing Materials, Stocking, Quality Control, Facility Layout and Manufacturing Processes)
Developing the Distribution System (Packaging, Shipping and Receiving)
For twenty years I have analyzed successful small businesses and I have asked a lot of questions from these companies that I have worked with. My goal has always been to find the common denominator that I can apply to my own simple small businesses and to help other entrepreneurs like myself.
I have uncovered something that, although may not be new to some, was revolutionary to me. I came to realize that all simple small businesses succeeded because they recognized that success comes from not one, but three different minds. This Trilogy of minds requires someone to CREATE the work, someone to GET the work and someone to DO the work!
Even when entrepreneurs discover this little secret they may not understand that these pillars must be built in this specific order. In other words, someone who has a love for something may build it or sculpt it (DO the work) and then look for a buyer only to discover that no one is buying. This is an example of doing things out of order.
Even a simple small business can learn a lot from the big guys. Sears department stores posted a tiny, 4% climb in sales recently (thanks to Kmart) while at the same time Pier 1 Imports claimed an increase of sales that reached a little over 12%. The high end store, Neiman Marcus, posted sales that showed an increase of 4.5% but Barnes & Noble, the low priced booked store, had sells fall much greater than anticipated. Zale Corporation, (the one that sales diamonds) said it had sales fall over 9% and Costco bragged of a 9% increase in store sales last month.
Even the experts are not in agreement as to the state of the economy. Some say the worst is still to come. Some state that we have not only hit the bottom, but have started the up hill climb out. With such confusing messages being expressed from the numbers, where are small business owners to turn?
As a small business owner, one of your keys to survival is learning how to interpret the mass amount of information that is coming at you all the time. This is a little bit art and a little science. It is experience, however, that will help you decipher the complex code of economics.