Grant Diggles

BUSINESS

3 Common Pitfalls for Small Business Start-ups

Last modified on 2009-10-06 19:30:44 GMT. 2 comments. Top.

Small business owners are prompted by love of craft and the desire to do things their way. This is not to be confused with an Entrepreneur, which is very very different. Here are a few pitfalls that SBOs run into in their first 3 to 5 years:

1. Underpayment/Devaluation/Underemployment

Many small businesses fail due to underpayment. The mentality of “charging less than the competitor” is a great idea if you’re NOT a small business. Small business owners typically under-charge because they themselves, devalue what they are offering. Excuse qualifiers such as “I’m just getting started and I’m not sure what I’m doing, so I’ll charge less until I figure it out,” is a typical example of the type of “self talk” SBOs feed themselves. This leads to underemployment where the SBO is the lowest paid person on staff (if there is any staff), no benefits, no vacation, etc. At the end of the day, what used to be a great idea slowly turns into a nightmare of scrapping by and working long hours just to pay the bills. Most of these types of SBOs don’t really go out of business, they simply quite due to exhaustion.

2. Lack of Differentiation

This is the lifeblood of small business. If you’re not differentiated, then every day that you’re still in business is a gift from God. It is commonly known that, in business economics, companies operate on 2 of 3 factors; quality, quantity, and price. Wal-Mart, for example, focuses on quantity and price by profiting pennies on the dollar x billions of sales. Unfortunately, Wal-Mart has a bad reputation for putting small businesses under, which in my opinion is only partially true. Small businesses need to respond to large companies like Wal-Mart by NOT competing in the same competitive fields. But rather, focus on quality and pricing, abandoning quantity altogether. Differentiate, differentiate, differentiate. You’re not Wal-Mart, so don’t try to compete with them. What makes you different enough, that someone would want to pay you for that difference?

Take this with a grain of salt, as the dynamics are too lengthy to encapsulate in this short blog.

3. Bad Business

The Thomas G. Jones Small Business Diamond states, “Bad business is always available”. Good clients pay on time, value your services, support your company and are generally ethical. If you have a client like that, you’ll do whatever you have to in order to retain them! Many small business start-ups don’t have the luxury of having many of these types of clients in their portfolio, and, in order to pay the bills, must take immediately available business to keep cash flow going. This type of business is usually… bad business. Client’s that don’t pay on time, give you a million change orders, argue about cost, micromanage, and are just plain rude. Too many bad clients disarm, deflate and discourage the passions of the small business owner. Only hang onto bad business as long as you have to.

Entrepreneurs and Small Business Owners – What’s the difference?

Last modified on 2009-09-30 18:27:17 GMT. 1 comment. Top.

There seems to be a lot of confusion as to the difference between Entrepreneurs (ENTS) and Small Business Owners (SBOS). Everyone seems to believe that, as a default, SBOS are ENTS because they were courageous enough to start a business in the first place. Unfortunetly, this is a common misperception and one that should be cleared up. Here is a comparison to consider:

SBOS: Love of craft and the desire to do things their way drives the desire to be in business.

For example, a person who enjoys gardening may decide to start a small gardening business selling flower arrangements, literature on gardens and seedlings to their local community. An SBO can think of nothing more inspiring than combining personal passion with income to create a lifestyle based on joy and fulfillment.

ENTS: The business of business and financial success are the driving forces of the enterprise.

ENTS are people who leverage. They leverage money,  resources and people to create, build and, many times replace themselves. Using the same example from above, an ENT may identify a social environment that is experiencing a growing awareness for community gardens. An ENT may then use financial leverage to recruit gardening specialists to build a pilot program for a community garden in the area. Through marketing and networking, this ENT would eventually grow a self-sustaining program that would allow funding for a permanent replacement to maintain and grow the business out of passion and expertise, more commonly known as…  a Small Business Owner.

As an entrepreneur I’ve come to realize that instead of trying to do everything myself, my real strength is identifying individuals who thrive in their giftings; and I bring them together to accomplish a common goal. In essence, I am only as good as the people I hire.

My partner, who is more Small Business minded, loves his craft. His real strength, is derived from being masterful. The more skilled and knowledgeable he is, the more value he adds to the business. In essence, he is only a good as his skill level.

An SBO may become an ENT. No successful ENT becomes, willingly, an SBO. But whether you’re an SBO or ENT is not important, being able to identify with and embrace the driving forces in your life, is.

3 simple rules to manage your time and promote business success. PART 1

Last modified on 2009-09-21 06:57:31 GMT. 0 comments. Top.

RULE #1: Use the power of “NO”

Several years ago, I was out to dinner with a client. We had a longstanding business relationship and had recently began building a more personal one based on common interests and activities. We both knew that we were unable to dine together without mixing business and personal together that night; and my client understood that I had a small agenda for our get together.

As the evening wained on I began to look for gaps in the conversation to change the subject and begin my proposal. My client, as intuitive as he was, sensed the earnest in my voice and stopped me. ”Before you get to far into the business side of our conversation, I must warn you of one thing”, he said “the answer is no, unless you can convince me otherwise.”

Admittedly, I was a little taken back by his comment as I wasn’t expecting such a hard fast answer even before hearing what my proposal was. I carried on however, and by the end of the night his answered never changed. It was still “no”.

I don’t tell this story to focus on my failure in “selling” my client or how to build a better selling strategy in the future, but rather, to bring attention to a valuable lesson I learned that night about saying “no”. Indeed, if my client would have said “yes” simply because he could, or because he thought he should for the sake of our friendship, I in my youth, would have wasted a large amount of both of our time and money in an idea that eventually fell to the wayside.

Many times in business, and in our personal lives, we say “yes” to too many things. The motivation for doing so is different for everyone; fear of looking bad or appearing mean, a desire to be liked or appreciated, a drive to prove you can do anything, etc. At the end of the day, it seems easier to say “yes” than it is to say “no” and we find we are over-extended, over-worked and exhausted, in part, because we didn’t get any of the things we wanted done, done.

If you value your time at the office, at home or wherever you are, take the advice of my long-time friend the next time someone has a great idea to add to your plate:

“THE ANSWER IS NO UNLESS YOU CAN CONVINCE ME OTHERWISE”

Rule # 2 – Coming soon…

3 simple rules to manage your time and promote business success. PART 2

Last modified on 2009-09-21 06:54:13 GMT. 0 comments. Top.

Rule #2 – Start asking “WHY”

Unlike any other time in history, people need to be evaluating, re-evaluating and changing to stay current in today’s market. The old saying “we do it this way because that’s the way its always been done” is all but dead in today’s current economy, and is only spoken of by those resigned to retirement or unwillingness to change one last time. Those people will walk the path of mediocrity or simply fade away.

I’ve been a part of organizations that were brilliantly run years ago. It was exciting, progressive and the growth was startling; we could hardly keep up. Today those same organizations are dwindling. The leadership is tired and the work, monotonous. The same strategies they used to grow the organization years ago, are now slowly putting them to sleep; their clients, leaving.

As you look at your business and your market, begin to ask yourself “why” you do the things you do. It may be because someone taught you to do it that way, or you found a way to get by and stopped trying at that point, or worse yet, its what everyone else is doing. You may find that you are part of an organization that has a culture that doesn’t condone this type of thinking.

“Movers and shakers” in any industry are not defined by their industry, but rather, they take the time to ask “why” and begin the process of redefining, first themselves, then their industry or environment. As you look at your daily tasks, begin to scrutinize everything you are doing by holding each task accountable to the “why” standard; you may find that you are simply a puppet and not the puppet master.

3 simple rules to manage your time and promote business success. PART 3

Last modified on 2009-09-21 06:54:30 GMT. 1 comment. Top.

Rule #3 – Always finish with a “WHAT NOW”…

We’ve all had them, meetings that you leave wondering, “why did we meet in the first place?” Nothing is more discouraging than sitting in long meetings that seem to be a waste of time for everyone involved, many things are said and nothing is accomplished. I have, to the best of my ability, done away with these types of meetings.

I’ve spoken with numerous people over the last several years that echo my concern in maximizing the use of their time. Meetings and conversations that seem to go nowhere, and many times, don’t seem to ever end. Painful moments in time where, to keep pointless conversations going, you begin to say things like “we need to get together sometime soon!” when you really know you have no intention of really wanting to connect with them.

Complete each of your meetings with a “WHAT NOW” statement. Is there an action plan in place to establish forward progress? Who is doing what, and when? You’ll find that if a “WHAT NOW” statement does not conclude most of your meetings, you’ll find that the meeting attendees will dissolve from the table and wander into their respective corners like lost sheep. You’ll lose any trackable progress and worse yet, your valuable time.

There are, of course, exceptions to this rule such as building relational equity with a client by taking them to lunch and talking about your families, or sharing information throughout the office in a staff meeting to make sure everyone is on the same page. In these circumstances, the meeting itself is the point and does not require a “WHAT NOW” conclusion.

As a rule of thumb, and as time management is concerned, if you cannot conclude most of your meetings with a “WHAT NOW” statement, you very well may have wasted you time.

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