Small Business Land Mines

Landmines
I have been working with small businesses and
entrepreneurial start-ups for much of my life. There are some wonderful
rewards and benefits in seeing something grow. There are also some
potential land mines that too many small, family owned businesses run
into that lead to problems, lost revenues and, sometimes, lost
companies. Let’s take a look at some of them.

One of the first
land mines that I run into 80% of the time is that small business
owners often equate prior success in another business, sports, etc., to
believing that he or she is brilliant in regards to running the current
business. This keeps many a person from hiring experts outside their
own field. I can’t tell you how many times I’ve been contacted after
companies have tried to run their own sales and marketing programs only
to have failed. They never have a business strategy, which should have
come first. They don’t know how to create one and they don’t understand
the value and necessity for their company to have one. Or, if they do
have one, it is sitting in a three-ring binder in a desk drawer that
never gets opened.

Decisions tend to be emotional and not based
on reason in small businesses. If you were running a "big business" you
would be thinking big and have a different mindset. It’s hard for small
business people to think this way because their decisions are often
compared against personal or family needs. And, there is often a spouse
or other relative that influences decision making yet knows almost
nothing about the things one would need to know to make a rational
decision.

I have often experienced situations where one member of
the family is purposely sabotaging the business. You think that sounds
unlikely – not in the least bit. I’ve seen a spouse create turmoil and
drive employees and customers away because they wanted the attention
their spouse was giving the company. I’ve seen one son engage in lying,
cheating and stealing because he was jealous of his siblings. I could
go on but please know it could be happening in your small business and
you won’t know it until it is too late.

Because there is often a
distrust of outsiders; advice from consultants, accountants and
attorneys is often ignored or only partially implemented. Sometimes I
feel like a physician whose patient tells him, "I decided to only take
half of the prescription because I was feeling better." – only to have
the patient get worse and need more drastic intervention. Again,
recognize you can’t have all the answers and you must trust and rely
upon others who are more qualified in a particular area of business.

So what can you as a small business owner do to avoid some of these land mines?

1.
First, focus on making decisions rationally. Assume you are a CEO of a
large company and do the right thing. Don’t get caught up in doing
things right which often means "the way we’ve always done them."

2.
Hire good advisers. Nobody has all the answers in a small company. Make
sure your advisers have the skills and experience to really help you.
My experience is that too many small business owners ask their accounts
or attorneys for business advice. Accountants and attorneys are usually
good accountants and attorneys but are often poor business advisers.

3.
If other family members are actively involved in the company make sure
they have the same accountability an outside employee would have in the
position. Treat them honestly and fairly as you should any employee and
not like "one of the family."

4. Make sure your spouse and other
family members are "on the same page" in regards to everyone’s role in
regards to the company. Even if they are not active in the company they
can be passively affecting it in a negative or positive way. Make sure
it is the latter!

5. Start each day by asking yourself, "How can
I provide value today for my clients/customers?" Focus on doing that
and many of the potential land mines will never enter your business
life.

Believe me, it is more difficult picking up the pieces and
having to unwind and re-start – and always more expensive than getting
good advice on how to avoid the land mines in the first place.

The Poole Consulting Group

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