Why your team members need to know why working in a small business is vastly different to working in a mid-sized/large company and how to use those insights to create predictable and consistent profits in your business
Let’s start with a surprising view of the Australian economic landscape and where Small Businesses fit in
There are approximately 2 Million registered business entities in Australia with the following break-up:
Large Businesses are classified as $250 Million+ and represent approximately .1% of all businesses… only 2,000
Mid-Sized Businesses are classified as $10 Million to $250 Million and represent approximately 1.4% of all businesses… only 28,000
Small Businesses are classified as up to $10 Million and represent approximately 98.5% of all businesses… a massive 1,970,000
(Nearly 90% of these small businesses are Micro businesses which are typically self-employed ABN holders)
Roughly 1 in 4 work in Large business, 1 in 4 in Mid-Sized and 2 in 4 in Small/Micro businesses
A disturbing fact is that the vast majority of these small businesses will plod along with no real return on investment for the owner(s). However, the Micro/Small business sector as a whole stays viable due to the large amount of new entrepreneurs who have a dream.
Let’s ask some tougher questions...
Why is it that a staggering 98.5% of businesses can’t seem to grow past the size of a micro/small business?
Why is the failure rate in this sector so high?
Why do so many fail to reach a point of desired, predictable and sustainable profit levels?
Some key areas where most Small businesses miss the mark and Mid-Sized/Large Businesses thrive that sets them apart:
A lack of Capital
Entrepreneurial/Leadership Skill Sets are not what they should be
Reasons for starting a business and the overall strategy are not properly thought through
Un-scalable Business Models that rely far too heavily on highly skilled owners and team members
Systems, Technology and Software that are clunky, lack sophistication and impede repeatable workflows
Top insights you can use to help your team understand how they can help your business grow
1 Awareness and Acknowledgement
Simply being aware of the above five critical key differences is a major first step. When every team member’s intent and attitude are in the right place, half of the battle has already been won, you’re all on the same page with the same mind-set
Team Takeaway/Insight #1:
Simple awareness, acknowledgement, acceptance and willingness to tackle these challenges is extremely powerful and is needed to move forward
2 Treat your Business as a Separate Entity
Every business, regardless of its size, has the same requirements, outcomes and needs in the following areas, in my coaching business we call these areas the ’10 Keys to a Profitable Business’: 1 Capital, 2 Strategy, 3 Leadership, 4 Team, 5 Systems, 6 Marketing, 7 Sales, 8 Delivery, 9 Finance and 10 Admin
Team Takeaway/Insight #2:
In reality, every business has the same basic needs regardless of the resources available to it, embracing and accepting this fact while not compromising on the outcomes that are needed is critical to succeeding as a small business
3 Organisational Chart, Functional Area Outcomes and Wearing Multiple Hats
Every business, regardless of its size, has very similar organisational requirements in terms of structure, some ways to tackle this issue are:
Divide your business into five key functional areas of: Marketing, Sales, Delivery, Finance and Admin
Be clear on ‘Accountable Outcomes’ for each of those areas
Create position descriptions/job roles within each of those five
Allocate those position descriptions to your team members.
Ensure everyone is crystal clear on which roles they are responsible for and how those roles contribute to your business
Understanding your capacity is vital… what is the maximum revenue you can generate per annum with the current team you have
Team Takeaway/Insight #2:
We won't have the luxury or resources (yet) to have one person performing just one role. Be prepared to multi-task across multiple roles while treating each of those roles as separate… as a team must be willing and able to perform multiple roles simultaneously
4 More with Less and a Sense of Urgency
Acknowledging that technology and software will be far from ideal while not allowing that to be an excuse for poor performance
Very little wiggle room in sustaining any kind of ‘stressors’ to your cashflow, profits or capital base, this must be constantly monitored
A great sense of urgency is essential to success, team members need to move quickly and with a great sense of purpose
An environment of open, honest and transparent communication is essential
What is your total annual revenue capacity with your current resources and team and be realistic about it and focus on mastering it
Have a clear path for growth and ensure you have a repeatable scalable model that every team member understands and embraces
Team Takeaway/Insight #4:
Committing to doing more with less is mandatory. Speed, a sense of urgency and laser-like focus on results are equally important… each team member needs to think like they have skin in the game… as if they were the owner of the business
Eric J. Gregory is the Author of ‘Would you like Profits with that?’ and the founder of
Gregory Business & Trades Coaching which specialises in working with SME Business Owners
and Entrepreneurs. For more information about Eric and his company
Please see http://www.gregorybusinesscoaching.com
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'To help SME business owners and their teams create Quality Lifestyles through Business Success'