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Interested in your thoughts on business growth
Welcome to this web site.
There are so many major challenges facing small businesses.
It will be interesting to read replies,
Thanks for commenting. I hope to keep this forum running for some time. I expect that the responses will be very informative. I am not certain which response will be used to frame the core of my research. However, I am certain I will learn from each answer. I hope the answers will be beneficial to others as well.
I can only comment on small businesses in Australia but I am sure there are not too many differences apart from what constitutes a small business. In Australia it is likely to be around 20 employees or less whereas I suspect you might be talking about businesses of up to say 200 people.
I worked in the aerospace industry for about 10 years, but that was many years ago. For the last 18 years I have been consulting to small businesses (as we define them). From this experience the major challenges I note relate to management skills, including both financial management and marketing.
Most small businesses are started by people with a trade or technical background, and they are likely to have spent many years developing and honing those skills. Yet they will have spentvirtually no time at all developing and learning management skills, and usually don't recognise the need for them.
Because of the lack of a management background they usually do not collect good information and data on which to make decisions, consequently they tend to make decisions based on hearsay, gut feelings and instinct.
Well, that's a view from Down Under.
I believe the challenges you cite are universal. I am certain that leadership will be a major part of my research and the development of leadership and/o management skills will be a major consideration. Thanks.
I participated as a co-host in a radio broadcast several years ago, with two gentlemen, one held a doctorate from MIT and the second, a doctorate from Yale. Initiallly, I felt like the kid from the other side of the railroad tracks, only having a Bachelors degree from a State University. Collectively, we debated a hypothetical issue of corporate finance, that being accrual base accounting vs. strategic matrix accounting. Let me explain this a bit and perhaps it will offer an idea to incorporate into your study.
Simply put, most small business owners operate their business from the financial perspective of accrual accounting, i.e. typically what an accountant utilizes from corporate finances, to structure reporting systems that reflect the numbers to Uncle Sam in order to maximize inherent benefits/responsibilities. These reporting systems in general, are not strategic nor do they offer a true picture in time of baseline budget straties nor real time variance reporting systems that allow pro-active financial management.
The hour long debate I held with these gentlemen was a great execise and reinforced my beliefs, (based on real executive level corporate experience), that small to mid size companies must incorporate financial reporting systems that address the day to day needs and performance criteria of the company itself. Uncle Sam doesn't care particularly if your company fails, as long as the tax rules are followed.
Lastly, I will add that for several years, I worked with small to mid-sized corporations as a turn-around consultant. I also worked as an interim CFO for firms that had been "forced" to seek protection under the Chapter 11 Bankruptcy courts. Each of these firms, lacked the financial reporting systems and CPM's that the ownership and senior management required in order to both guage the success of the firm while at the same time, be accountable in a measured format, for meeting profitability performance criteria. But, they all paid their taxes and followed those rules to the "t".
I hope this idea is of some use.
Thanks for your response. I will use your information to investigate small business/startup failures. I am certain that financial management will play a major role.
Clarity of brand in an ever crowded marketplace.
Simply put, how does leadership ensure that the brand message of a company remains constant and relevant with all the different channels of communications that are opening up? A lot of people see the internet as websites and banners but it is developing into so much more with blogs, games, social networking and other avenues. How does leadership maintain the brand in an environment where they are not creating or controlling the message? How does their marketing needs evolve? How do they adapt to the changing technology and how it effects their business?
Mark Cuban, dot com pioneer, commented that television will more or less fold the web into it as another channel with the new technology that is coming out that will allow people to surf the web on their televisions. If this is true how will this affect small and mediums businesses? And how does leadership prepare itself and their business for what every change occurs?
A very interesting topic. I am not certain how I will narrow the question such that I can adequately address it in the short amount of time available to complete a dissertation. However, I will gie it serious consideration. Even if I am not able to use it as my dissertation topic, I believe the question is relevant to any business that is gorwing beyond the point where word of mouth can be an effective marketing strategy. Thanks.
I assume you want (or are required) to choose a topic that's aligned with your field of study, expertise, and future career path. Perhaps the following will trigger an idea or problem statement that you would find enjoyable to explore:
Obviously, small businesses fail at a high rate (so staying in business and growing the business are universal challenges). When small businesses fail quickly (first or second year), my perception is that they do so because the business concept was ill-conceived or poorly planned. I believe when they struggle and fail more slowly, however, the reason is almost the result of actions taken (or not taken) by the founder/leader.
Larger employers typically have some type of leadership development program, and are mandated to provide people in formal leadership roles with regular training on a variety of topics to ensure compliance with federal, state, and local laws. They don't give untrained or inexperienced supervisors the authority to make decisions that might devastate the company. This kind of responsibility is reserved for senior executives.
In contrast, a small business owner can become a "boss" (with all the responsibilities of a first line supervisor, mid-level support manager, and senior executive rolled into one) in the span of time it takes to drive to the county clerk's office and a local bank. Not only do they have the authority to make decisions that might bankrupt the company, but the business is usually too small to be subject to the employment laws that guide larger companies -- so these bosses can really screw up people's lives. Of course, competent small business leadership can result in huge positive differences that affect families, neighborhoods, communities, and sometimes even entire industries.
Given that potential, and the fact that more than half the businesses in the U.S. fall into this category, why is there not a broader interest in developing small business leaders? Granted, universities and private firms offer a wealth of valuable and relevant courses, and the SBA has a few things, but it is generally up to the business owner to voluntarily pursue these -- and most never do.
I'm not advocating that federal, state, or local governments pass more laws that impact free enterprise -- but what if they required people to actually know something running a business before they could create and register one? What if people had to know something about managing employees before they hired them? What would be the positive and negative consequences? Have any jurisdictions actually done this, and if so, to what outcome? What knowledge, skills, experience, judgment, traits, and actions differentiate the leaders of successful small businesses from those of failed or failing businesses (in other words, what competencies or proficiencies should be demonstrated, tested, or verified)?
Those are just some of the questions and problems to explore there -- perhaps something interesting has jumped out at you. If not, I still wish you the very best on your research and presentation.
Thanks for your insightful comments. I am certain there is an specific idea that I can use to focus my work. I hope to keep this forum going and I look forward to additional comments. Thanks again.
Several years ago the Small Business Administration performed an extensive study on why businesses fail. Among the top reasons were the following:
1. Lack of planning
2. Trade credit issues
3. Poor cash flow
4. Poor recordkeeping
5. Failure to use advice
In my own consulting practice, I have encountered clients and other businesses who faced difficulties in their own businesses and fought for survival for the following reasons:
1. A lack of accounting and finance knowledge
2. The failure to plan beyond a few months
3. Not knowing their markets and how to reach them
4. Not having clearly defined and measurable objectives
5. A cash burn rate that outstripped their financial resources prior to market delivery
Many of these issues can be narrowed to one: financial management and administration. Bankruptcy stems from a number of variables within this particular framework. Lack of money management has many on the ropes because the understanding of financial management is so very poor. Financial management encompasses three important factors: a) proper planning, b) proper financial management tools, and c) proper business practices. One of these would be a very ideal topic on which to focus, or simply researching how not to go bankrupt.
If you wish, we can discuss more on this.
Hope this helps
I concur with all your comments. One symptom of the issues that you have noted from your own work that I frequently find is a lack of information and data across all the areas you mention. Without decent information the decisions are are usually uninformed or, more frequently, not made at all. Without information owners and managers often don't realise that there is problem. With information the nature of the problem, and the required solution, is usually fairly obvious.
There is a plethora of information on the topics I highlighted as problem areas for the small business. You might try some the following for starters:
1. Allbusiness.com - a goldmine of well researched and scholarly articles from a number of reputable sources. Just enter into its browser what you are looking for, and you will be well on your way to a discovery of indepth information on a variety of business topics.
2. Pick up a copy of Writer's Market at your local bookstore or Amazon.com. It has a list of scholarly journals in accounting, finance, planning, and so on.
3. Amazon.com - Numerous books and journals on financial management topics
4. Business.com - Another great resource for performing research
5. American Journal of Business (www.bsu.edu/mcobwin/majb) - One scholarly journal resource for research.
The above are just starters that will lead to even more resources that are unending.
Another resource for original information is the survey much like the SBA did
I have found one of the greatest challanges for a business to succeed, is finding a plan of action that works, and then staying to that plan and adjusting as needed.
I can take my current business plan to 100 different business consultants and recieve 100 different improvements.
There is most certainly a recipe for success for business.
Unfortunately, everyone has an opinon as to the ingrediants.
The even bigger problem I have found is that if you do find something that seems to work, it could be months, weeks, or even days before someone with more money and more experience take your plan of attack, run with it, and leave you holding your pen, scratching your head.
Above all, within business, I have found the politics impossible to sort out. I had no idea when I first started my business, that it would be so extremely difficult in so many different aspects.
Every victory I find, is usually followed up by a potentially even bigger loss.
You can try and focus on the small victories, but you cannot ignore the even bigger losses.
Just when you think things cannot get any worse, a much bigger business kicks you a couple of times to try and make sure you do not get back up.
As an independent, it is impossible to succeed. I have been offered to join business assoications, but I will not join anything unless I know what I am getting into,
These business associations make it impossilbe for outsiders to succeed without their approval.
The business associations that I have tried and join, I was accepted about as much as a weed in the middle of a rose garden.
I continue on never failing never waivering as my life depends on my success, and I have found that my only chance for success is to continue this struggle.
Like a weed that you just can't uproot, I keep coming back for more, hoping some day that I will succeed.
I get sick to my stomach sometimes when I see successful business owners, knowing they had to put X amount of business out of business to succeed.
I finally came to the realization that for others to succeed I must be unsuccessful and vice versa.
I do not have the "killer" instinct when it comes to business, as I would happily share my wealth with a business in need if I was successful. So I might continue on unsuccessful, but at least I will be usuccessful with my dignity and self respect.
I refuse to quit, and will continue on, successful or not.
intechspecial, with apologies to aelliott for diverting this thread a bit, I'd like to offer an observation. You describe yourself as analogous to a weed ("Like a weed that you just can't uproot, I keep coming back . . ." -- how revealing!).
In central and south Texas, we have wildflowers blooming along the sides of all our highways right now. Botanically speaking, the only real difference between a "wildflower" and "weed" is that one enhances the landscape it is a part of, and the other detracts from it.
Using that analogy, think about the landscapes that you are a part of -- your industry, your community, the business associations you mentioned, potential customers, competitors, and other stakeholders. Can you make a list of specific things you did this past week to enhance that landscape? More important, would those people be able to name specific things you contributed this past week that made the world a little better place (or would they more readily be able to name something distracting, annoying, or contentious that you did)?
If you choose, you can reclassify yourself as a "wildflower" instead of a "weed." It means enhancing the landscape around you, rather than thinking in terms of either choking out some other entity or being eradicated yourself. To put this in practice, you stop measuring things in terms of success and failure -- you only measure the quantity and impact of your positive contributions to something or someone else.
When you're routinely making positive contributions and enhancing the landscape around you on a daily basis, you find that people begin to really want you there. They start to nurture you. And if you're really contributing, there won't be enough of you to go around -- and they'll pay good money to have you in their gardens. On the other hand, if you're behaving like a "weed" . . .
A "weed strategy" can certainly work in business, but it takes a bit of that killer instinct you say you don't have. Perhaps the "wildflower strategy" is worth a try. Best wishes.
(Again, my apologies to aelliott for getting away from the purpose of the original post.)
Lighthouse, I agree. And also apologize for the highjack. My intent is not to put other advertising agencies out of business. My intent is to open and run an advertising agency that reflects my beliefs and standards. I need my competitors, as they raise the level of their game I am forced to do the same. I enjoy reading about their account wins and seeing them in the awards shows - it encourages me. I don't want what anyone else has. I want my own. There is a difference in this beleif and the belief that for me to succeed someone else must fail.
Intechspecial, just look at this forum. Many of us are competitors, yet information flows freely here. A lot of us don't seem that interested in destroying our enemies. Maybe, we are different, but it is a good different. It is an honorable thing to stand on one's principles, and not follow the crowd. Success may come slower, but it will come and last a lot longer - and it will be so much sweeter because it came on your terms.
Lighthouse, I am sorry if I said exactly what you said but I just had to say something.
Lighthouse - Thank you for your comments and admiration. I apprectiate your sincere felt willingness to help.
Iwrite - Thank you as well, I appreciate your need to be of assistance.
Intech, a weed is in the eye of the beholder. In some parts of this country, people consider geranium a weed and get rid of it whenever they can. However, my wife plants and cultivates geraniums every year.
You are not a weed. You are a person who cares about their product and service. You may not be as big as the big guys but is that your plan? My plan is to be bigger than I am now but I don't want to be too big.
By getting too large, I would not be able to do the things in my business that I enjoy. I like working in my shop creating current and new products. I like being able to talk to my customers directly and getting feedback from them. My new ideas are coming from customers looking for certain items and wanting to know if I can do it.
I am proud of being a SMALL business person.
No apology needed. This is an excellent posting. Thanks.
"As an independent, it is impossible to succeed."
WOW thanks for letting me know that. I have been 'independent' for 14 years and always manage to earn as much as the guys and pay my bills and feed the technical start up.
Oh and I guess I should not tell you that we are now testing the software application.
Impossible to succeed? Explain that. I can't wait to hear the answer.
my name is Patrick Walker
I feel that small businesses just dont have reaourses needed to compete with the bigger corporations.
not having advertisement and marketing leave a small business to rely on foot traffic.Thats why I joined Metamorf a global solutions provider equip to take care of big problems for small business save money on credit card payment systmes,telecommunication cost (phone,fax) consulting
make money on contact centers,advertisement dollars, 24/7 inernet maintence make money while you sleep email email@example.com tell him Patrick sent you
I am not a business owner -- so business owners please correct me if I am incorrect. But based on my experience with many close friends who own their own retail businesses I find that a common challenge may be not being focused enough - so trying to do it all, or trying to sell it all - - when in fact, they maybe better off staying focused at what they do best. I don't know what the stat is, but I hear that many business owners own more than one business.
Bluesuit! Where have you been?
Yes us small business owners usually are gluttons for punishment, I own two businesses. One pays the bills the other one eats money!
I am a small business owner and i can give you alot of information on challenges that I am expericing mow ! if you want to contact me
Victoria 786 285 9430 be glad to help !
Can you write email firstname.lastname@example.org with contact tel.number and email addess. I will call you soon.
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Excited about the opportunity to participate in this forum. I currently work as a corporate officer in a local defense contracting consulting organization. However, I am also a pursuing my doctorate in organizational leadership. I am in the process of determining my dissertation topic and I am very interested in researching a topic that would benefit small and mid sized businesses. I would be interested in hearing from any of you regarding your ideas of the major challenges facing small businesses.