To be a successful small business owner you need many diverse skills and characteristics. Including those of a world class mountaineer, mechanic, psychologist, Gandhi, and magician!
All needed for your arduous and challenging business voyage.
Characteristics starting with resilience and a high tolerance for failure. Added to the ability to lead, to be flexible, tough, and resourceful, and self-motivated.
While at the same time being humble.
Being self-aware and having the willingness to reach out for advice. The skills to delegate and be a team player and an autocrat … and the list goes on.
All these qualities and skills carefully woven together for the ultimate prize ... a successful small business.
Small Business Owner Resilience
In a recent webinar, Raizcorp CEO Allon Raiz made some interesting comments. Based on his 20 years of experience in business and through supporting more than 13,000 entrepreneurial companies.
He quotes a research paper which showed that the re-entry rate [the number of times entrepreneurs start again] is 3.6 times in the US. Whereas in South Africa this is only 1.1 times. Raiz believes that this statistic has a lot to do with what he calls the structural shame that exists within South African society.
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Raiz adds "The US, for all its ills, does not shame failure.” Conversely “In a weird way, it venerates failure.”
For South Africa, and countries with a similar ethos, this is a disturbing comment. They need many more successful small and medium-sized businesses. And anyone who has been there is aware that entrepreneurial ventures are a succession of misfires and pivots. Or corrections from mistakes!
However small business owners from the countries with this attitude may lack two critical characteristics,
- a high level of resilience and
- a high tolerance for failure.
The characteristics needed to try and fail and try and fail again.
The Impact of the Covid Crisis
In a conversation with one of Raiz’s clients, he was told: “Covid-19 was the best thing that has happened to me in a long time. I went from pain to shame, to changing my game".
Raiz differentiates between “opportunity entrepreneurs” and “necessity entrepreneurs”.
Opportunity entrepreneurs are the ones who search for money-making gaps in the market. Those who are aware of changing circumstances and looking to find potential opportunities.
During the pandemic, people who previously had inhibitions about buying online were forced to do so. Businesses that previously were only considering e-commerce went digital in droves. While traditional bricks and mortar merchants were cutting jobs, digital commerce businesses snowballed.
He compares this mindset to that of a “necessity entrepreneur”. Someone who is forced to start a business because they have no alternative. He believes that if they were given the chance, most of these business owners would rather take up formal employment instead.
Torn between the freedom and benefits of self-employment and the security of a monthly salary, the monthly salary is the winner.
Teamwork as the Path to Success
One of the attributes missing with many small business owners is “the ability to reach out for advice”.
It may be a case of penny wise pound foolish! As they are unaware of the costs of them being the bottleneck.
The owner may think that they can do the job better than anyone else. So, they try to take on everything themselves. Believing that as it is their way it must be the best way!
This is a fallacy as every successful business needs a team.
A team who are excellent at their individual work in addition to being aligned with the organizational goals. A team with a committed vision.
Great things in business are never done by one person. They're done by a team of people
~ Steve Jobs ~
The owner must be aware that it is impossible to read a label from inside the bottle.
Then with understanding their limited perspective, the leader should create a culture of open and honest feedback. Encouraging plain-speak and developing the process for getting advice from their trusted team members.
The team needs to have a level of trust that permits true debate and constructive conflict to occur.
What prevents this in large companies is politics. What blocks it in many small firms is friendship.
The role of the owner then, is to give the team space and resources to be excellent at delivering results.
Even with an open and candid culture, all businesses need an external perspective. Impartial views from someone not in the business but who understands the business.
Advisors whose role is not threatened as would be an employee. Larger companies have non-executive directors. Whereas most smaller businesses have nothing!
Except the owner's limited and filtered view from inside the bottle.
In Summary
Small business ownership is a tough and relenting ride and without skilled and candid support most small and medium business fail.
With a change in perspective and a clearer understanding of what drives business success many of these failures could be avoided.