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Small Businesses don’t know what’s Broken

Every week I run across small businesses who could be richer, more efficient and effective and, dare I suggest, more productive. Their problem could be finance. It might be process. Or structure. It could be their internal culture or a labour force ‘bad egg’.

But it’s not as easy as poking your head in their front door and saying “Hey, you could be $50K better off at the end of this year if you do X and Y.” Their response would more often than not be a barrier that would preclude any chance of further conversation.

“Get the fuck out of my business!”

So they lumber on doing what they do well enough to stay in business. The ‘bad egg’ keeps disaffecting morale. Money that should be in the account remains unpaid, or is tied up in assets that really should be leased. They simply don’t know something is broken.

Nearly every time, it turns out the problem is deeper – they don’t have a business plan or an integrated marketing strategy. And if they do, it’s very rare that small business have considered keeping those as live documents that can be used to out-compete competitors.

Or they mistakenly believe that every business doing roughly the same thing as their business is a direct competitor.

Most of those small businesses haven’t had the time or inclination to investigate the Competition and Consumer Act 2010, formerly the Trade Practices Act 1974. Just walk around your CBD shopping environment and look at all those “NO REFUND” signs.

This is where I push forward an unwanted piece of wisdom. Small businesses should consider paying somebody, or a team, to manage and grow their business with a strategic focus. Hire some decent management. Simple. Hire people that understand human resource management, organisational culture, how to author and maintain and implement strategies in the market. Hire people who know the legal and ethical responsibilities. Someone who understands the cost of capital and time value of money in decision making.

Just like that same small business might be smart enough to pay an accountant or a solicitor when the need arises.

Why? Because a professional should make a business far more money than they ever cost. And, at the same time, the business owner is freed from the time-consuming soul destroying tasks they were never trained to undertake.

Quite often I find myself walking out of these small businesses and scratching my head as to whether they’ll be operating in 2-5 years. I can’t help it. But if they don’t know anything is broken they’re not going to want to hear how to fix it. We had a roofing tradesman here last year who I could almost guarantee is rolling over a $100K short-term loan to cover his slack approach to collecting money due.

Now you know the challenge of being a business development management consultant. And what they do beyond the infamous management jargon.

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About the Author

Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark (aka nortypig) and I live in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a photographer making pictures with film. A web developer for money. A business consultant for fun. A journalist on paper. Dreams of owning the World. Idea champion. Paradox. Life partner to Megan.

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