Archive | October, 2013

But My Business Is Different

14 Oct

unicornI am of the belief that the greatest obstacle to business success is the business owner.

But I get ahead of myself.

As a lifetime student of business, a small business owner, and as an educator, counselor and consultant, I have the opportunity to work with small business owners on a regular basis.

The Small Business Administration (SBA) definition of “small business” is quite generous; including entities with up to 1500 employees and generating up to $21.5 million in annual revenue.  So in reality, I work primarily with “micro-businesses” – entities of 10 or fewer employees (and typically less than $1.0 million in annual revenue).

And on a regular basis I am asked to counsel start-ups that cannot seem to get off the ground – or existing businesses that refuse to grow.  I am confronted with a plethora of reasons why they are failing:

  • Changes in legislation (either over-regulation or lack of protectionism – depending on one’s political affiliation and the day of the week).
  • Changes in technology (the internet is killing us).
  • Outsourcing (China and India are killing us).
  • Competition (we can’t compete with Wal-Mart).
  • Increasing costs (fuel costs are killing us).
  • The prolonged recession (is killing us).

Interestingly, all of the above mentioned negative conditions tend to be drivers of new business opportunities.

Don’t misunderstand me – starting a business of any kind is a challenge.  But there will never be a perfect environment in which to start a business – especially if your mindset is “my business is different.”

  • “I’m an artist…my business is different.”
  • “I own a restaurant…my business is different.”
  • “I’m a government contractor…my business is different.”
  • “I’m a software developer…my business is different.”
  • “I’m an 8a (WOSB, SDVOSB, etc.)…my business is different.”
  • “I’ve been in business for XX years…my business is different.”

This refrain signals a business owner who fails to understand the fundamentals of business and is unwilling to change.  To quote Bob Newhart on Mad TV, “Stop it!” – if you haven’t seen this comedic sketch, check it out

Which brings me back to my original observation – the greatest obstacle to business success is the business owner.

So to help small business owners overcome their quandary and move them from excuses to action, I refer to a methodology for breaking down and evaluating their business.  From there, they can identify troubled areas and develop a roadmap for improvement.

Here is the breakdown:

Your Idea – this is where most people start and stop their business planning; and it really is where your business needs to be different (i.e. creative or innovative).  Even if you are selling a commodity (and many products and services quickly become commodities), you need something different to distinguish it from all the other similar products.

As 500 Startup founder Dave McClure says, “Customer’s don’t care about your solution, they care about their problems.”

Ask yourself these three questions:

1. What is your product (or service)? Hint: If you can’t explain it in 1 or 2 sentences – it’s too complicated.

2. What is the problem you are trying to solve with your product?

3. What is the value to your customer?

Now get off the computer, get out of the office and find out what’s important to your customer.  Talk to them.

Your Business – you don’t have a business until someone is willing to pay you for your product. Again, three questions:

1. Who is your ideal customer?  Hint: if you answer “everyone needs what I’m selling” then you’re going to have a hard time reaching paying customers.

2. How do you reach them? Remember, social media is a tool not a strategy.

3. How do you make money? Let’s face it – only nerdy accountants think business finance is cool.  But the small business owner needs to understand the fundamentals of his/her business in order to determine feasibility, growth and funding options.

Your Company – the legal “stuff.”

1. Are you the right entity?

2. How are you organized?  Owners need to work ON their business, not IN their business.

3. Who are your trusted advisers?  No one can go it alone.

Whether you are a pre-startup, a startup or a growth business, you must be able to give specific answers to these questions before you can proceed.  Don’t move forward until you can.

I know this may seem simple – but it’s effective.  I’m amazed at how many business owners cannot answer these key questions – but when working with willing clients these simple questions can make the difference between success or failure.

One final observation based on my experience with small business owners – if you can honestly answer all these questions (and are truly applying them to your business) and your business isn’t growing then either 1) you are trying to sell something nobody wants – in which case you didn’t do the research, or 2) it might just be you.

If your business is struggling, perhaps I can help.  Or if you think I’m just full of myself, reach out to your local Small Business Development Center (SBDC) for assistance.