“Everyone is ignorant, only on different subjects.”
One of the biggest problems I face in working with small business owners is that there are many who simply don’t know what they don’t know. While researching past, present, and future small business issues, I found that the vast majority of issues that small businesses face have not significantly changed over the past few years. A few have been added, such as data security especially with the introduction of “the cloud,” the greater use of social media.
For example, the New York Times identified the following top ten reasons for small business failure:
Not enough demand for the product
Owners can’t get out of their own way
Out of control growth
Lack of a cash cushion
Lack of a succession plan
Other surveys I’ve looked at identified similar issues. In a lot of cases, these same small business issues have been around for years. There are still a great number of small businesses who do not consider using Facebook, Twitter, Instagram, or LinkedIn for marketing their products. Additionally, there are many who still don’t have a data backup or disaster recovery plan. Finally, and this is very disturbing, many small businesses don’t feel it is important to have a company website.
One author stated that many small businesses reach the point where they need to professionalize themselves and get out of the entrepreneurial mindset if they are to grow or, in many cases, survive.
So, added to the pressure of running the business is the challenge of professionalizing the business. This can be done in one of two ways, by hiring professionals or outsourcing to professionals. Many small businesses have a few positions wearing multiple hats to accomplish strategy, sales/marketing, product fulfillment, customer service, and such. In many cases, some of the hats that are worn don’t fit as well as they should. Unless there are unlimited financial resources, most businesses do not start off with Controllers, Chief Financial Officers, General Managers, Chief Technology Officers, Chief Marketing Officers, and other executives or specialists. This is understandable, but there does come the time when many of these roles must be filled in order for the company to move forward.
Of the ten reasons above, nine of them deal with operational controls. The owner/Chief Executive Officer could work on the strategic issues, but then he/she would have to give up some of the control over the day-to-day operations which many have a hard time doing, thus number two above. So the challenge for the owner is not only knowing, but admitting that they must fill some roles with professionals, and also knowing and admitting that they must relinquish parts of the business to others who know more. It’s knowing what they don’t know and admitting that they don’t know it.
That’s the hardest part. The easier part is identifying where they need the help and whether to fill the role with a full-time employee or outsource it. Another consideration might be the timing of filling the role. For example, the function may be needed and at some point in the growth of the company a full-time person will be wanted and warranted, but at this stage, there is no need to incur the ongoing costs associated with a full-time person. This is where the interim CFOs, CEOs, CTOs and CMOs come in. They can fulfill a vital role in getting the company through a rough time and back on track while implementing strategies that can be taken over at a later time by a full-time employee.
There is another area of consideration. The roles I mentioned above are primarily held by strategists. They are not generally the people who will get down in the trenches and actually fix the current problems. They are big picture kind of people, not necessarily tactical implementers. The implementers are the specialists I mentioned previously. If you look at some of the problems, like out of control growth, operational mediocrity and inefficiencies, dysfunctional management, cloud computing, social media, and online presence, these are operational issues. There are IT, marketing, process and project management aspects associated with each of these problems which mean that either the business owner or the interim executives must also consider filling these specific roles as well. If not, a nice evaluation report will sit on the owner’s desk until it collects dust and is eventually thrown away.
So, in summary, all small businesses reach a point where in order to survive and grow, they must professionalize themselves. They must fill some vital roles which have been lacking in order to take the next step. Along with the strategic roles, there must also be tactical roles which must be filled. Most importantly, none of this happens unless the current business owner/Chief Executive Officer realizes, acknowledges, and accepts that he/she doesn’t know everything and that there are professionals out there that know more than they do about certain aspects of business. Without that realization, the business will fail.