How to Make Your Small Business a Success

Reverse the failure trend and make your small business a success - growing, profitable, cash rich and working for you. 

“SMBs are the heartbeat of our economy, driving jobs and growth. Their dynamism plays a huge part in the UK’s ability to innovate and export”

~ Nikhil Rathi, CEO, London Stock Exchange PLC.

The question is, “If they are so important why do so many small and medium sized businesses fail?”

These businesses are the backbones of the world’s economies with their spirit and energy driving innovation and exports and creating high-quality jobs.

But within ten years, more than 90% are gone. And with their passing goes hopes and dreams ... and lots of money!

Life of a small business owner

Every small business owner knows that life is tough and lonely with never ending relentless pressures.

As a business owner, I remember when getting off work at lunchtime on a Sunday was an achievement. Short relief after six days of 18-hour workdays! Family life suffering and the never-ending financial grind of getting payments from customers and worrying about paying suppliers and staff. 

Not really owning the business but being a slave to the business. Consumed by it as it drives you towards a premature grave!

Slowly the dream becomes a nightmare.

There are good times. But they get further and further apart and not reaching the intensity and enjoyment they once did. Becoming distant, forgotten memories.

This life was not the dream we had when we started. This life is not what small business owners deserve after taking risks and working relentlessly towards their goals. 

SMEs all have the same functions to manage as the largest corporations. But they don’t have all the skills needed. 

They need to build the momentum of a large business. But they cannot afford to get the best people to help them do it.

Larger businesses have specialists and the luxury of people like non-executive directors to supplement the skill base and provide accountability and perspective. Whereas the small business owner is on their own, needing support in all the areas where they lack the skill or don’t have time to prioritise.

Five reasons why businesses fail

There are many reasons, but the final death knell is no more money!

1. The failure may be destined from the start with not having a viable business idea or starting with poor to non-existent market research. Setting out with nothing more than hope as the strategy. 
2. The business owner may focus on the wrong priorities as they spend time driving meaningless measures like social media “likes” instead of profit and cash. 
3. Management does not understand the critical business drivers and the costs in the business.
4. The business runs out of customers. It doesn’t have a sustainable sales funnel from prospecting to closing. Or it neglects existing customers and, over time, loses the good ones to competitors.
5. The business lacks the necessary skills – especially financial skills. 

Added to these five reasons are many more, from people problems to a lack of innovation and poorly considered decisions. 

The Gig Economy

One solution to filling the skills gap is to use part-time resources. As with these, the business can get any skill it wants cost-effectively and efficiently through the gig economy. Which is now a vibrant, growing industry that meets both the business requirements and the aspirations of the service providers.

But this option can also add to the business owners’ woes. Finding and managing remote staff is a skill. So being unsure of how to find and get the right people, it is put off—adding another task to the long list of “important not urgent” to-dos!

Why a SMB needs a part-time Chief Financial Officer or CFO

Most small and medium businesses can’t afford and, just as importantly, don’t need a full-time CFO or Financial Director ... or even the next tier of a full-time Financial Controller. 

But to build a successful business, the business needs the knowledge and skills that they provide. 

Many small business owners are not “financial” people. They are specialists in their fields and do not want the hassle of the financial “stuff”. They may know it is important but don’t know what to do and they don’t have the time to develop their knowledge. 

This isn’t seen as an urgent priority until it’s too late. 

The solution for making your small business a success

The missing link is to employ a part-time financial executive. A person who can focus on the financial requirements and give the owner the time to get on with running the business. 

Time to service customers, find new customers, improve service, and innovate product offerings—and the time to build systems, delegate, and manage and motivate staff. 

Providing the owner with the time to think about building the business. And the time to work both in and on their business. 

A skilled part-time financial executive can also guide the business owner: 

• developing the tools to monitor and focus on the most critical resource in the business … the cash,
• creating a picture of the business in numbers, identifying weaknesses and improvements, and highlighting where the company is doing well and where it needs attention, 
• building a business management system,
• understanding the importance of people and systems and developing ways to make them work together,
• operating as a mentor and coach,
• being an accountability partner for the owner, 
• ensuring that the “right issues” stay top of mind ... and action!
• providing an external business and industry perspective,
• investigating changes in technology. Finding ways of doing business that will make it easier and more efficient.

Building a successful business and taking it to the next level needs a broad perspective. There are many parts to the puzzle, and it takes time and skill to put them together. 

Finding optimum solutions needs a combination of views and skills.

The sauce for success is expanding business skills with part-time specialists. With the most important one being the part-time CFO. 

The Final Outcome – a viable and profitable small business

With the right resources the probability of success of the business will multiply. The owner will have a “partner” to add missing expertise and be a sounding block—someone who will provide a set of valuable skills which are not required full-time but are crucial. 

To all SMB owners, “Can you afford to be without one?”