The end of the third quarter of 2018 is just around the corner, and we are in a safe position of evaluating what this year has meant for small business owners so far. Over the past few months, I have had the pleasure of talking to CEOs and entrepreneurs from various disciplines. What I discovered is that most of them are facing common challenges even if they compete in diverse industries.
My first-hand experience as a CEO and Consultant allows me to unravel the mystery behind some of their struggles and walk my way down to the root of the problem. From my understanding, the evolution of their business is equally marked by good signs and bad omens, which they may attract depending on their next move.
In their defense, some of the challenges that small business owners are facing in 2018 seemed impossible to predict at the start of the year. Hence, their current situation is not entirely their fault.
The good news is that there is still hope, and if these entrepreneurs can turn things around they will manage to avoid being part of the 50% of small businesses and startups that fail by the end of their first year, according to the US Bureau of Labor Statistics.
Nowadays, too many small business owners misunderstand the importance of proper financial planning. You might be inclined to place the blame on the boasting attitude of millennials who want to bank everything and everywhere. However, the reason behind their shallow grasp of basic economics goes deeper than generational finger pointing.
Most of the CEOs that run startups prefer to focus on cash flow rather than on sustainable profitability. Their knowledge of P&L and net profit barely scratches the surface of what should be their fundamental creed for success. In fact, many of them leave the financial aspect to their CPAs, who might be more or less qualified or interested to keep the enterprise afloat.
How to Fix It:
A talented manager knows the importance of devising tasks and responsibilities among its trusted workforce. In this regard, hiring a competent CFO with a better understanding of financial management could be an optimal solution.
Additionally, if you don’t want your company to crumble before the last quarter of the year ends, you should try to enhance your financial knowledge. Hereof you can join a seminar about running an enterprise or consult an expert for a crash-course in business administration.
Hiring the right person for a job is an essential process for your company’s success. A talented worker who radiates proactivity may be a cornerstone for reliable and predictable evolution. Knowledge comes once again into play here, and you should consider creating a competent and devoted group that fills in the blanks where you lack the expertise.
As I mentioned before, some of the challenges of small business owners are unpredictable, and staffing is one of them. What may seem like the suitable candidate for a position in your company could prove to be a disappointing choice just three months into the job. Recruiting employees is costly, and replacing them will burn an even bigger hole in your budget. However, you should never give up on replacing good employees with great ones.
How to Fix It:
Find a recruiting company that has a successful record in hunting down talented people. It might cost you more than you would expect. Nevertheless, at the risk of changing several people for the same position in a short span of time, this solution could become a rather cheap alternative.
Next, you should establish a performance management system within your company and set up goals that will eventually weed out the less productive or devoted employees. In this regard, you can approach the services of a management consultant with solid experience in this field.
Brand Awareness and Marketing
Most small business owners come from the sales department. Through networking and experience, they have found unexplored niches and develop business ideas that can catch quickly and create demand.
These entrepreneurs might even have a good grasp of economics and a good understanding of human resources. However, where they fail to excel is building an audience for the product or idea that they have on offer.
Creating brand awareness requires more than just an eye for easy sales, which is why many startup CEOs struggle with their marketing goals. You need to find the right strategy to grow a solid reputation in your field and attract the right type of support from your followers.
How to Fix It:
First and foremost, you need to focus on PR and how to employ successful strategies that will transform you into a recognizable brand. You can try to hire the services of a Public Relations expert or company to enhance your visibility and help you find your voice in the industry.
Additionally, you need to create a powerful image of authority in your market. Fortunately, today you have social media channels that can do almost half of your job if you know how to steer public opinion in your favor.
Last, but not least, a common challenge for most small business owners in 2018 regards time management. Conducting a startup is time-consuming and without a strategy, you risk sacrificing your productivity and long-term lucidity.
As an entrepreneur, you need to look at your startup as a learning experience. There is no need to feel stressed about not being enough hours in a day to complete all your tasks. Along the way, there will be failures and shortcomings, but these are safe and reliable ways of understanding more about your managerial abilities.
How to Fix It:
Firstly, you should learn how to delegate tasks to your team members. You can’t do everything, and even if you could, you would probably not succeed in all your endeavors.
Next, hire an assistant that can schedule your priorities, or if you can’t afford it, at least use a common calendar with notifications on your phone or your computer.
And finally, you should just accept defeat when and if it comes your way. Learn from it and adapt to improve your future enterprise.
For help with your startup or under-performing portfolio company, contact me at Portfolio Management Group for a no-cost, confidential consultation. There’s never an obligation or pressure. Take some action today!