The Small Business Dilemma – A New Zealand Perspective

The owners of small businesses have to cover many roles across their business and often with little support. They need help to achieve the success they seek, but in many cases they either don’t look for it, or they have trouble finding the right help at the right price.

Many of the advisors, banks, funders, and all those servicing small business have difficulty helping them. These businesses are fragmented, costly to engage with and most service providers can’t offer even the most basic support and make it financially viable.

So why does this matter?

Consider these figures from Statistics NZ. (The percentages are not dissimilar in other countries)

1. Of the 480,000 businesses in New Zealand around 425,000 have five or fewer employees – micro businesses
2. Approximately 325,000 have no employees.
3. Unfortunately micro business are 10 times more likely to fail than larger organisations.
4. The service and support available for business in New Zealand tends to be focused on larger organisations, exporters or businesses with high growth potential. Very few of the micros in New Zealand fit into these categories and simply do the best they can.

Business owners need to find the best support they can afford. New Zealand’s DIY attitude may often mean micro business battle on alone, hoping to sort things out but often slipping further into difficulties.

Owners need to think about the unique challenges of owning and running a small or micro business.

Succeeding in a micro business must start with recognition that business, family and personal lives connect in ways that don’t apply to bigger businesses. The challenges of small businesses are often unique, so looking for solutions that ‘the big guys might do’ often won’t work. Most micros start for lifestyle reasons. They are owned or operated by families or people in relationships (e.g husband and wife). The owners are typically juggling not only every aspect of the business but also the needs of the family “.

So if you believe this describes you consider a few things:

1. Accept that you have many roles to fill in your small business.
2. Accept that you can’t be good at all of them nor will you enjoy all of them.
3. Seek out help. It is out there and you may have to spend some money to get the help you need.
4. You can’t do it all. You will have limited time and money so you have to prioritise.
5. Be kind to yourself. Small business can be tough and if you don’t care for yourself you won’t be able to care for your business.

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Do You Really Care About Your Small Business? Work On It!

It often amazes me how passionate small business owners are about their business yet how little time they set aside to work on improving the overall business and their wellbeing.

All their time is spent beavering away in the day-to-day operations of the business. This may be a major contributor to why so few small businesses last more than five years.

Consider what Abraham Lincoln said:

“If I had nine hours to chop down a tree, I’d spend the first six sharpening my ax.”

Most small businesses spend no time on the ax. They are caught up in all the tasks because they have no one to delegate to. The week’s roll into months, the stress levels rise and the owners look up and wonder how they got to where they are – and not where they wanted to be.

Small business owners must consider the bigger picture. They must set aside time to look at ways to break this cycle. Not only will it benefit the business, it will benefit their wellbeing and those close to them.

Michael Gerber, author of the E-Myth, put it well:

”You might say that while going to work on the business, people begin to realise that it is a powerful metaphor for going to work on their lives. And that, I believe, is the heart of the process; not efficiency, not effectiveness, not more money, but to simply and finally create more life for everyone who comes into contact with the business, but most of all for you, the person who owns it.”

So how do you achieve this?

• No one can give you more hours in the day. You simply have to decide what is important for the long-term success of your business and plan your time.

• Establish that this is important. Only then will you put priority on it and only then will everyone else around you also accept it is important to you.

• Start with 10 minutes a day, an hour a week or half a day a month. Whatever you decide put it in the calendar and commit to it.

• Plan to get away from the office, computer, and phone. Disappear, turn off the phone, clear your head and focus… you may really enjoy it!!

• A very effective way to do this is to do the process with a mentor or another like-minded business owner. It forces you to both be available.

• Remember, the process is enjoyable, motivating and gives you a break from the day-to-day pressures.

So, if you are not happy with where your business is and where it appears to be heading, plan to do something about it. Any small step is a good step.

A final quote from Albert Einstein on the definition of insanity:

“Doing the same thing over and over again and expecting different results.”

Where Is Your Business Heading And What Guides You?

Often the word used to describe where a business wants to go in the long run is its Strategy.

“Strategy” is often seen as the domain of the military or big business, not small business.

However, strategy and thinking strategically is even more vital for a small business.

Small and micro businesses are 10 times more likely to fail than a larger business and most don’t last more than five years (Statistics NZ). Small business cannot survive the shocks big businesses can.

No matter how big a business is, it never has unlimited resources. IT MUST MAKE CHOICES.

Firstly, what it WILL DO to be successful. Even more important is what it WON’T DO.

Many small businesses say yes to too many things and suffer from doing nothing well.

Every business exists to meet the needs of someone, typically customers. If a business does not meet these needs as well as an alternative option or competitor, those they serve will go elsewhere.

So the process to develop your business strategy needs to answer two key questions:

1. What will you do and what won’t you do now and in the future to achieve the success you seek from your business?

2. Who are your customers and how do you serve them?

The challenge is knowing what will guide you when you are faced with these questions? There are no books, rules or procedures and no expert that will provide the answers for your specific business. The “compass” that will guide you is built within the clarity around these three statements:

• “Why your business exists” (Your Purpose).

• “What your business stands for?” (Your Values).

• “Where you want your business to be in 3-5 years?” (Your Goals).

The clearer you are on these three key statements the easier it will be to make the choices about your business.

For example, say an opportunity arises to partner with someone. You ask yourself the following questions:

• “Will I remain consistent with why I am in the business by entering into this partnership?

• “Does this person share the same set of values as me?”

• “Will this partnership help me reach my goals?”

If the answer is YES to all of these then great. This partnership is worth serious consideration. If the answer is NO to any of them, tread carefully and think things through before proceeding, or you may regret it!

Think strategically – everyday!!

It is one thing to define the strategy for your business, which you review from time-to-time. What is just as important is the process of thinking strategically in the day-to-day running of your business. Strategic thinking means that you are always considering your choices with an eye to the future of your business. You are always asking yourself:

“How does this action or decision get me closer to where I want the business to be?

This could relate to the way you market your business, the type of people you employ, the logo you choose, where you locate your business and so on.

The more time you spend defining and clarifying the strategy for the entire business, the easier it will be to make decisions on a day-to-day basis.

To finish with a quote:

“If we are facing in the right direction,
all we have to do is keep on walking.”

- Buddhist proverb