When the COVID-19 pandemic hit, small businesses across the globe were forced to either adapt quickly or shut their doors, in some cases for good. It is easy to blame the reaction from governments, pre-existing weak areas in the economy, and the virus itself for the problems and struggles that have taken place over the last few months. For some businesses and some industries, this blame is well-placed.
However, I’m here to tell you that it isn’t the pandemic that is at fault in a lot of cases, it is a collective lack of preparedness that allowed the pandemic and resulting lockdowns to shake the foundations of small businesses everywhere. In other words, in some cases the pandemic didn’t cause the problems so much as it revealed them.
If you feel this message applies to you and your business, that statement may sting a little. I am sorry if it does. Here is the thing: you are not the only one and you are not alone. The good news is that if you can accept responsibility for the problems, it means you have the power to resolve them by preparing your business to better cope with our “new normal” of uncertainty and rapid change.
That preparedness starts with education. Very often you have business owners who are quite talented at creating their products or providing their services but have not had much in the way of business education. Individuals are often driven to open their own small businesses because of a specific passion and not from the desire to actually ‘do business’. That does not make them bad business owners, but it does mean they could be better business owners. And being a better business owner is key to owning a better business and getting through challenging economic times. When the pandemic hit, vulnerable points in small businesses became visible in three key areas: time, money, and their team or culture.
The Time Problem
The vast majority of small business owners that I speak to and work with have one thing in common: they have too much to do, and not enough time to do it (or so they think). What needs to happen in this scenario is for a shift in how the business owner thinks about time and how they manage their time. You are the perfect result of your calendar, and calendars never lie. Read that sentence again. What that means is that if you’re not getting the results you want from your business then it is at least in part about how you are spending your time. If how you spend your time is not aligned with your goals and what you say your priorities are, then that will certainly be reflected in a lack of results. And a lack of results means a lack of stability.
Think of an elite track and field sprinter. There is no denying that they are passionate about their sport and likely naturally gifted. However, if the sprinter says that they have set a goal for themselves to shave half a second off of their personal best but they spend their time looking for sponsorships instead of training for speed, they won’t get there. So what should they do? Hire someone, an agent, to look for the sponsorship deals so that they can spend their own time working towards their goal of running a faster sprint. It is the same for a business owner. You need to think about the results you want, what activity (or activities) produce those results directly, and how much of that activity needs to be done in order to reach your goal. From there you will be able to build out a calendar for each day, week, month, even year that will get you the results you want. Everything else is delegated or takes a back seat.
When you set yourself up for success from the perspective of your calendar and managing your time properly, you get more results, and you become a better business owner. More results mean more stability in your business, and more stability in your business means a greater chance at surviving economic hardships. I have another blog post that dives deeper into a business owner’s relationship with time which I encourage you to read if you have not already done so.
The Money Problem
You may be thinking “But I can’t keep a business afloat without money coming in the door, and when COVID-19 took away my customers, it also took away my source of income!” That is true, the pandemic did stop money from flowing through the economy the way in which we were familiar and expected to continue. What becoming a better business owner allows you to do is to not only get more results (with better time management), but also to plan, forecast, and set aside more money for a ‘rainy day’ so that when that day comes you have a better chance of surviving. What the pandemic did was expose a lack of financial preparedness.
What you don’t measure you can’t improve. That is true of everything, including results that produce your income – sales. First thing’s first, are you receiving regular reporting on everything that you need to know in order to run your business successfully? If so, are you paying attention to what the reports are telling you? You need to pull together everything that you need to know so that you can regularly analyze, understand, and take appropriate actions to improve your business’ performance. Know the key performance indicators that need to be measured in order to assess how well your business is performing and create a dashboard of those metrics. The best way to determine your KPIs is to think about what information you would need if you were only able to have a one-hour weekly conversation with someone in your business and that conversation had to inform you of what is working and what isn’t. When you look at that dashboard you will be able to identify the activities that need to be ramped up in order to perform i.e. make more money, and you will be able to reasonably forecast where your business will be financially one week, one month, one year from now. Once you have an understanding of what is working and you have a forecast, you need a plan. If you do not have a revenue & profit plan and an associated tactical marketing plan, you will be hard-pressed to get where you are forecasted to go, and you won’t be sufficiently prepared to weather any economic storms that come your way.
The People Problem
Running a successful business isn’t all about money. Proper business education means development of leadership, communication, and delegation skills. And what happens when you lack those skills? You don’t get the culture that you want, you get the culture you deserve. To put it another way, the team that wins the Stanley cup is often the team with the best culture, not necessarily the most talent. Showing up with good leadership, excellent communication, and the ability to delegate the proper tasks to the proper people ends with a team of the right people, doing the right things, right who are all in alignment with your business goals, and a commitment to getting there. When you create a culture that doesn’t foster enthusiasm, high-quality work, and loyalty you wind up with people who won’t hunker down with you in times of hardship. If your people aren’t inspired to follow your leadership and don’t connect with the underlying values and goals of the business, they’ll be just as happy to quit, stay home, and collect their emergency benefits from the government, leaving you high and dry.
So how do you make sure your people are on board and with you for the long haul? Become a better business owner. Get them involved in understanding your values, your goals, and your strategic plan. Share your passion through leading them with open communication and ensuring that each person is assigned to the areas in which they have the most to contribute. Encourage their participation and help them learn from their mistakes. Establish a proper team meeting rhythm that involves daily check-ins, weekly huddles, and regular longer format sessions that allow everyone to share what is working, what is not working, and what needs to happen next. When you involve your entire team in this way you not only improve your culture and foster a drive to succeed in your people but you also end up with a well-oiled machine where everybody has a specific purpose and redundancies and inefficiencies are eliminated.
Fulfilling The Ultimate Purpose of Your Business
This is not an exhaustive list of the areas in which business owners would do well to further their business education, but it is a great starting point in not only becoming prepared for future economic crises but also fulfilling the ultimate purpose of your business. No one was born to do business until they die. You were born to live, your business is just the vehicle that allows you the time and money freedom to do so.
I help my clients become better business owners by working with them through the 5 Steps to Freedom:
- CREATION: In this stage you’re beginning as an unknown in the marketplace, creating or updating your business plan and unique selling proposition.
- CHAOS: Things begin to feel ‘out of control’ and you need to begin to create systems to stabilize your business and reach the next stage.
- CONTROL: Here you can start to convert cash flow into profit through organized operations, measuring metrics, and fine-tuning your business model.
- PROSPERITY: You can finally enjoy the fruits of your labours with an efficient business that runs mostly without you thanks to a competent, driven team.
- FREEDOM: Reward yourself by growing your business through partnerships, joint ventures, and acquisitions. You have free time and free cash flow.
If you are interested in learning more about the 5 Steps to Freedom, furthering your business education, and becoming a better business owner then I encourage you to join a free, live webinar I am hosting on June 16th at 11 AM Pacific. You can see more details and register for the webinar by clicking below.