According to the latest stats, the small business community accounts for 99% of businesses across the UK.
Though it can vary by country and industry, a clear definition of a small business is one that is ‘independently owned and is limited in both size and revenue’. Therefore, whether you class small businesses as a ‘one-man band’ or an independent accountancy practice employing 5-9 staff members, one thing is clear when it comes to small businesses: There is clear opportunity for growth.
However, with just 9.6% of businesses reaching the 7-figure mark, what prevents small business owners from achieving consistent and sustained growth?
Peanuts, Get Monkeys
When you first start a business, the thought of employing someone else can be a daunting one, particularly if both revenue and cashflow are tight.
As a result, it is commonplace for small business owners to first employ an individual on a low to average wage. Though this is deemed ‘lower risk’, this is one of the fundamental errors made when first starting and growing a business. Why? If you pay peanuts, you will get monkeys.
Aside from having to re-do all the items of work your staff member failed to complete to your current, high standards, you will waste even more time in training and development, removing your focus from the business in hand. Employing someone who is experienced and able to hit the ground running from day 1 may seem like a daunting task, but in reality, it will provide you with the time and headspace to focus on what really matters: Growth.
When you’ve put blood, sweat and tears into building a business, it can be difficult to delegate the day-to-day tasks to others. This is a common problem for all small business owners, but to grow, effective delegation is a must.
A proven way to implement and drive delegation is listing all of your tasks and grouping them into different job functions of accounting, marketing, operations etc. Anything that can easily be completed by someone else, shouldn’t be completed by you.
In completing this process, not only will you start to realise that delegating smaller, menial tasks will provide you with the opportunity to focus on the bigger picture, but that your staff – if hired at the right level – are competent enough to complete them to the required standard, enabling you to build a positive company culture where employees feel trusted in their roles.
Afraid to Spend
A key thing that prevents small business growth is committing a decent level of spend to core functions like Accounting and Marketing.
So many business owners fail to commit anything to either function and then wonder why the business doesn’t develop and grow. Where an efficient accounting function can take control of day-to-day bookkeeping and make decisions based on a monthly P&L, a proven marketing agency or in-house Marketer can implement an effective strategy to engage with core target audiences and drive consistent growth.
The key here is to be patient. Despite how much you want and need overnight results, growth activities like marketing take time to operate efficiently and deliver results.
Perception of Value
When Small Business Owners first launch their product or service, they often undercut market competitors in pricing to generate initial sales. Although this may work in the short term, it quickly gives the false impression that things are going well, when in reality you are working 100+ hours per week for very little return.
When launching a new product or service to the market you need to be clear on your value. For example, if you’re a recruitment agency and all competitors offer 15% commission, offer 15% commission. If you’re a personal trainer and the average hourly rate is £50, you need to charge £50.
Every business should have some form of sales operation. Why? If the business owner is in staff 1-2-1s, on annual leave or focusing on operations, who is out there selling the brand, product or service? The answer is no-one.
It’s true that good salespeople are challenging to find, but when you do find a good sales representative, they will not only be self-motivated in the development and implementation of an effective sales strategy, but it will only be a matter of time before they start paying for themselves.
Remember, small businesses stay small for a reason – and this reason normally lies with the business owner, too concerned about letting go of the day to day running of their business to step back and focus on long-term growth. However, if you take the leap and get comfortable with being uncomfortable, it is just a matter of time until you reap the rewards.