Too many small businesses go in under-prepared at the start. Too little planning, too little capital to back them and too little prior experience in running a business.
Most of the businesses that fail are expecting to build their dream into reality, much quicker than is possible and simply run out of cash. They have unrealistic expectations around the value of their idea coupled with misconceptions around funding, thinking investors will beat a path to their door. They rarely do.
Two of the biggest obstacles for small businesses face are access to good people and access to capital.
Taking the next-step, a lot of small businesses seem to stumble transitioning between being tiny/micro into being a genuine small business. Initially the owners have complete visibility and are involved in all decisions (because they have to...), but as they scale up, add a few employees, maybe other locations, add more products to the mix, they have to delegate authority, make people accountable, put systems, policies and procedures in place.
At the same time, they are trying to cope with more volume and waves of increasingly complex work.
Many businesses spend countless hours, wasting valuable money writing a strategic business plan that they don’t have the skills or experience to implement.
Owners become overwhelmed – not only with the complexity, but by underestimating the effort required. Things either get poorly implemented, damage the rest of the business during the implementation, or get thrown into the ‘too-hard’ basket.
This is the #1 area where they come unstuck. And herein lies the paradox; often they go to their trusted advisor looking for help but walk away still needing help.
If you assemble the right people around you advising and supporting you as you face the challenges of running your business, you might just beat the odds.
Finding the right people creates a dilemma. Firstly, whether to address capacity or capability and secondly whether to try to create it internally or bring it in from outside.
In addition, attracting talent becomes much easier once you’ve become successful, so the best available people in the market today might feel a young growing company represents a risk to their career aspirations.
Some people say hire capacity for now and capability for the future, but this sounds inefficient to me.
Having high calibre people working below their skill level will chew away at your bottom line.
Doubling your capacity, doesn’t address the skills / capability mix either, you can just do twice as much of the same. An alternative to consider is using an on-demand seasoned professional who strategically understands all aspects of business, so you can reach your potential.
Can’t afford it? The late great American Red Adiar, the world’s pre-eminent oil well firefighter said: “If you think it's expensive to hire a professional to do the job, wait until you hire an amateur."