To be a successful small business owner you need a wide range of skills and characteristics. Including those of a world class mountaineer, mechanic and magician!
All of these needed for your arduous and challenging business voyage. Starting with resilience and a high tolerance for failure. Added to the ability to lead, to be flexible and tough and resourceful and self-motivated. While at the same time to being humble. To have the willingness to reach out for advice, the skill to delegate and be a team player and an autocrat … and the list goes on.
All carefully crafted for the ultimate prize ... a successful small business.
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.
Raiz adds "The US, for all its ills, does not shame failure.” Conversely “In a weird way, it venerates failure.”
For South Africa, this is a disturbing comment. The country needs many more successful SMB's. And all entrepreneurial ventures are a succession of misfires and pivots. However South African small business owners may lack two of the critical characteristics, a high level of resilience and a high tolerance for failure. Those 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”. Those who search for money-making gaps in the market. Being aware of changing circumstances and finding potential opportunities.
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 are cutting jobs, digital commerce businesses snowballed.
He compares this mindset to that of a “necessity entrepreneur”. Someone 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.
Teamwork as the Path to Success
One of the attributes missing with many small business owners is “the ability to reach out for advice”.
They think that they can do everything better than anyone else. So they try to take on everything themselves. Believing that as it is their way it must be the right way!
Every successful business needs an aligned team. A group who are excellent at their work. A team with a committed vision. The role of the owner is to give them space and resources to be excellent at their work.
Great things in business are never done by one person. They're done by a team of people
~ Steve Jobs ~
It is impossible to read a label from inside the bottle. So the leader should create a culture of open and honest feedback. Encouraging plain-speak and a process for getting observations from their trusted team members.
The executive 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.
Even with an open and candid culture, all businesses need an external perspective. Views from someone not in the business but who understands the business. Experts whose jobs are not threatened by the owner. Larger companies have non-executive directors.
In most small, and in many medium-sized, businesses their only view is from inside the bottle.