Let’s call him Raja. Yes, so we have Raja who is from a decent family and is at the point of making a life decision. The decision is to get employed or to become an employer. Raja can join his father in the business of manufacturing imitation jewelry or get a corporate job like many of his friends. Now our Raja is contemplating. He does not want to be in corporates as he does not like being called a ‘corporate slave’. Not that he understands why and what of that term; it just doesn’t sound right. The idea of joining his father too is not very encouraging because you know he does not like being told what to do. Raja suddenly thinks of his uncle who is a trader, he’s always on phone talking business, he is that guy who pronounces authority whilst talking to his people and he spends well! Of course, he must be successful, therefore. Raja decides to talk to him, understands capital required to start the same business, margins that the uncle quotes and where to buy the products from. An entrepreneur is born, a small business owner that is.
At the cost of generalizing, this is how most small business owners come into being. They either participate in their father’s small business or start on their own without understanding the model and scalability. The uncle Raja thinks is successful may be struggling to get work done by his people and that is why he has to talk to them and customers himself. Having the ability to spend more in a small business is easy but is that the only thing one would want? The unsaid aim of many small business owners is to become free and still be able to earn more than their corporate buddies. Nothing wrong in that; the only problem is the common mistakes that they end up doing.
I am listing 3 most common mistakes small business owners make:
- Becoming a BOSS: Unfortunately, a lot of small business owners feel their job is to tell people what to do and hold them to account. They are entitled to be called ‘Sir’ in the office. It is very common to see owners call their people, assign them tasks every day and take updates. If the business is not successful, people are called, some heated conversations happen. A perception of “I only have idiots” is built in the mind of the owner and everything remains the way it is. Employees are confused and the owner continues to hope for things to change. There is no plan, no goal, no direction. “Hamari market mein yeh hi hoga!”, “Hamari market mein aur kuch nahi ho sakta!”
I always ask, “How much do you expect from an employee in return, say a sales guy?” Most small business owners would say 5 to 10 times more than his compensation. Then I ask, “Don’t you think you should be expecting the same, if not more from yourself as well?”, “Should you not think of growing your business 5 to 10 times more from where it is?” Now that’s the role of the owner. The small business owner has the potential to do just that simply because most in his industry won’t think that way. His role is to think how his business can scale, what his customers want and how can that be delivered most efficiently. His role is not to be a ‘boss’ by simply emulating what others in the industry are doing, but to figure out and do what others are not doing.
- SMART person is the solution: As a consulting company, one of our offers is Propel Boards. Small business owners come to this once in a month event and help each other solve business problems using the Propel I am impressed to see the kind of solutions they come up with on the boards. I feel surprised though, that for most small business owners who I meet in networking events or whilst prospecting, hiring a smart person to do the job is the solution to all their problems. Now I am not saying you must not hire a smart person. I am also not saying that it is never a solution. But this certainly is not the solution to all the problems. If you missed an order because the person could not locate the product in the inventory, the warehouse must be fixed and not the person.
It is important for the owner to get into the practice of going to the place of problem, identifying what the reasons are and solving the real problem. It’s called Gemba – A Japanese term meaning ‘the actual place’. In business context it means the place where the action happens.
- TIME Estimation: ‘Rome was not built in a day’, as clichéd as it may sound, this is something most small business owners miss out on. They start doing something that they think is the most important to focus on; then halfway through their priorities change and what they started is left and a new initiative takes birth. Apparently, like the last time this too is now the most important thing to do whilst the last one is forgotten. Time is not respected even with decision making. Right decisions sometimes are right simply because they are taken at the right time.
As a small business owner, you must take up 2 to 3 key areas to improve your business in a year and stick to them. Get them to their destination. Complete them. Completing the improvement may not give you results right away; the results would start after you have completed the improvement. Taking from the example I used above, getting the warehouse in order, racking products, labeling them and barcoding the inventory by itself is no result. The result will be seen when you work with such a warehouse for 3 to 4 months and have had no missed orders.
Procrastinating decisions don’t help as well. For anyone to make a decision, information is required. If the decision is not life ending, take a call with 40% – 50% information, don’t waste your time getting 90% information and then validating it. Besides getting all information required to take that call may not even be available. Like they say, take a call and make it right.
A student who remains in the same grade year on year is not considered an academic success. Small businesses must become big business and not just about sustain for decades. That is not success either. The process of becoming a big business starts with the owner – the skills and the knowledge he possesses and how beautifully he gets it executed.