It's been 10 years since I started advising business owners, full time. In those 10 years my greatest joy has been the people I have met and worked with: other professionals, employees, board members, executives, but most of all, business owners.
These are women and men with great creativity, boundless optimism, and a staggering capacity for hard work.
These people have shared their hopes and fears, and trusted me to be a hand at their backs when it felt like one more day of failures and frustrations was going to be one more day too many.
I too, have felt that hand at my back. Often from the very people I was there to support, from understanding and enthusiastic friends and family, but from more than anyone, my wife. As any married entrepreneur knows, your spouse plays the most powerful role in helping you dig deep to make the possible a reality.
As I celebrate these 10 years it's a great opportunity to share a list of things I have learned that had an impact on performance, success, and failure, in my own business and those of our clients.
This list isn't definitive, no 'best' or 'top' adjectives. This is just a list of ten difference-makers from the last decade.
1. Size Matters. There is a sense in much of the small business community that 'good things come in small packages'. That might be true of jewelry, but it is rarely true in business. Every business has its own unique 'right size', and that size is seldom small. A business is the right size when everything that needs to be done is getting done, and is being done by people who love doing that thing and do it well. That seldom describes the lone owner. No one is good at doing everything, which means in a very small business many things are being done poorly or not at all. The resulting stress, overwhelm, and poor ROI on the investment of blood, sweat, tears, and time, make it tough to justify the existence of the business. In Canada a small business is one with fewer than 100 employees. Even small isn't that small.
2. Time Matters. Outside of the storied and rare unicorns of the tech startup 'new economy', nothing happens quickly in a business. We say that a month is a heartbeat, a quarter is a breath, and a year is a day in business time. It takes years to establish market share, and build a high-performance team and the management skills to lead it. In our experience most old economy businesses - like manufacturing, retail, trades, hospitality - take 3 years just to find their feet and 5 years to create sustainability. Then plan another five years - assuming you have good guidance - before you can start to see the kind of financial rewards that make your effort worthwhile. If you aren't ready for a 10-year slog, don't start a business.
3. Cash Flow Matters. Not just sales and profit, but cash flow. When the money comes in and flows out that matters as much - and often more - than how much. The low-hanging fruit we see here, over and over again? Pricing and collecting. Almost all cash flow problems start with under-pricing, and a failure understand the importance of gross margin. At the other end of the accounts receivable cycle, businesses (other than retail) leave money uncollected for too long. They don't take deposits, don't have any form of recurring or subscription payments, and leave unpaid invoices unaddressed for weeks. It doesn't matter if we've sold a million dollars in contracts if the money's not in the bank.
4. Selling Matters. Many of the challenges small business owners face in are mental. Micro-management, fear, lack of trust, risk-aversion, the subscription to mythologies/expectations like 'work-life balance' or 'common sense', all divert focus from where it belongs: on behaviours that grow the value of the business. An aversion to sales is a mental barrier to success. Many business owners we talk to don't even like selling. They think it is beneath them; somehow slimy. They avoid it at every turn. They believe by marketing hard (social posting, SEO, vehicle signage) they can somehow avoid the act of selling something to someone. They believe Instagram posts are a substitute for the selling. Business is selling. If a business owner hates - or is bad at - selling, it is time to find a partner who is good at it. That's the only way it's going to work.
5. Administration is Magic. There aren't a lot of silver bullets in business. But effective administration is a silver bullet. Few things will transform the life of a business owner, or the trajectory of the business, like good administration. This is connected to the Size Matters point. We can all only do a few things well. To sell, to manage, to develop, we can't be up until midnight doing our own books or managing schedules. Hiring someone like a competent bookkeeper, Virtual Assistant, or data entry person will transform your small business like nothing else I can think of. We have helped hundreds of small business owners bring in administrative support in the last decade and have never once seen a small business owner regret that move.
6. Networks Aren't for Selling To. Networking and network-building are poorly understood by many business owners. It isn't that you shouldn't sell to someone in your network, but that isn't why you are building a network. Your network exists to connect you to knowledge, information, support, and yes, opportunities for sales. Your network is not just a list of potential customers. A great business network is a web of energy, strength, and possibilities. Size matters here too: the larger your secondary network (those outside of your 150 or so closest peers, friends, customers, and suppliers) the greater the potential for growth, learning, and improved performance... and sales. Every business owner will increase the potential for greater success by growing their secondary network, and by treating those relationships as something more than just a collection of leads.
7. Trust Is Everything. All things being equal, a high-trust business sells more. The same relationship justifies higher prices. A high-trust business has lower employee turnover and higher productivity. It can receiver better terms from its suppliers. Trust is the most powerful influencer of perceived value. The more I can trust you, the more valuable you are. It is that simple. Manage expectations, communicate clearly, do what you say you can do, become an expert in your area... any investment you make in increasing ability of others to trust you will have a positive bottom-line impact.
8. Gratitude Matters. The evidence is extremely strong, and subjectively borne out in 10 years of encouraging it and expressing it: gratitude grows businesses. Expressing gratitude improves mental health, improves performance, and strengthens any meaningful relationship. Intentionally identifying things to be grateful for, and expressing that gratitude has a positive impact on employee, customer, and supplier relationships. Focusing on things to be grateful for makes the brutally hard work of growing a business and managing a team bearable. Want to do one small thing to lower your anxiety and sense of being overwhelmed? Take 5 minutes at the end of each day to identify things to be grateful for. Want to do the same for your employees, raising trust and productivity at the same time? Take 5 minutes every day to express your gratitude to a different employee. One of the most powerful impacts of finding things to be grateful for and sharing them with others, is it addresses squarely one of the biggest challenges in business: the sense of working constantly and getting nowhere. Often we, and our team, have come great distances but we were too busy to notice. Slow down, be grateful, and notice how much has been done. That is a powerful motivator to work even harder.
9. Business Owners are Incredible People. Rocket science and brain surgery - often used as metaphors for 'something extremely difficult' - have nothing on growing a successful business. In no other human discipline can you wake up morning after morning to find everything changed from the day before. The constant and unpredictable change, the increasing rate of disruption, the hundreds of things to be good at, and the central role of that most unpredictable thing of all, other human beings, is like playing poker but having the cards in your hand changed randomly just as you figure out what you were holding. Successful business owners not only survive in this madness, they thrive in it. Successful business owners are passionate about the their industry. They care deeply about dozens and sometimes hundreds of other humans, providing economic health and often the greatest source of meaning - their work - in their lives. Successful business owners add value to their communities. They are role models of independence, risk tolerance, and independence for our youth. Many of the business owners I have met in the last 10 years are simply the best people I know. I am grateful for every day I can spend in their company.
10. I'm Just Getting Started. Jeff Bezos says it is always Day 1. I'm just getting started every day. I will say I am just getting started on the last day I do this work. It will always be Day 1. Because as Bezos said, “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” In that sense, a business is a musical or theatre or dance performance: no performance is ever perfect. There is always one more thing to work on. Every night is opening night. I have learned an incredible amount in the last 10 years. I have accomplished a great deal, and have met the most incredible people. I am grateful for every moment of it. But I'm just getting started.