Managing instead of leading – You have no choice anymore. If you run a business, you are pre dominantly a leader. Not a manager or technical expert but a leader. That’s your specialist subject. Hire the technical whizz kids, recruit the product developers, engage with expert marketers, outsource or get someone else to manage the finances. If your business is to grow, you have to take a step back from being involved.

You have to move to a facilitation role. Understand you’re not the most intelligent or competent person in the business, but that your expertise now is in driving people towards that common purpose. Its not about controlling but inspiring, its about doing the right thing not doing things right, its about seeking change not order, not about organising but about engaging with people and, above all else, trusting people to do the doing.

Failure to adapt to shifting customer trends – Customer expectations have changed, however, most businesses are failing to respond to this. The traditional differentiators have almost disappeared; product, price, place etc. Social media is heavily influencing the agenda. We are a lot less impressed with average stuff and customers can find you easier than you can find them! When all things are equal what is it that people buy?

Mass marketing and weak universal appeal are dead, yet we still need to create and develop a loyal customer base. That means developing a new relationship with existing customers and those prospects that are showing signs of being great future ones.

Not all customers are equal. Businesses that succeed recognise that and organise their business accordingly. It requires two simple strategies. Customer acquisition where you are trying to change the prospects mind and customer retention where you are trying to maintain the mindset. The two need a slightly different approach. Any proactive marketing and customer loyalty programs need to focus on the great customers not attracting the poor ones.

It’s a case of not fearing customer rejection but customer indifference.

Failure to adapt to new marketing approaches – The old ones are the best. Not any more. The world is littered with both small and corporate businesses that failed to manage this one. The development of new technologies and the internet has suddenly restored a lot more ability to the small business in terms of marketing.

Many small businesses have become wedded to a marketing strategy they created when they first set up and continue to use the same tactics even though the world has moved significantly on. Small businesses are not conglomerates and must face up to the fact that they shouldn’t be attempting to market like that.

Word of mouth is having a resurgence, social media is allowing us to build our credibility and reputation like never before and to a worldwide audience if we desire. No longer do we have to spend large amounts of money on newspaper adverts, radio advertising, brochures that are immediately out of date, exhibitions that cost thousands and rely on a declining footfall. Why? Because they simply don’t work. 

Marketing for the small business has suddenly got a lot more cost effective and easier to do. Yes you need huge amounts of imagination and creativity to implement it, but if done properly, will bring a better return on investment and a better customer.

Loosing ones nerve – In the initial stages the start up business owner takes a risky path. Whether it’s a huge investment of money, re-mortgaging, giving up a great job or spending time away from family and friends. He/she is not afraid of digging deep into their pocket, nor their soul, to make things work, deliver a great product, find fantastic customers and grow their business.

Then it reaches a critical point. A place where everything that stimulated the company’s rise starts to slowly diminish. The owner suddenly acquires deep pockets and short arms. Risk becomes too risky and the business starts to lose touch. Touch with its customers, touch with its people, touch with new products/services and touch with new trends and thereby starts the path towards decline.

It can happen for a number of reasons. The owner is financially comfortable and won’t risk that being compromised. The owner is tired. Lets face it, it takes an enormous, unwavering amount of energy to grow a small business and sometimes, we just run out of steam. Or, in many cases, that’s as far as the expertise, knowledge and skills run and its time for someone else to take over, either through acquisition or through a new management team. Recognising this five years ahead of it happening is critical so succession planning can take place.

Planning that far ahead can mean the difference between your company being worth a good sum or absolutely nothing.

I’ve just tweeted this article from “Wired” magazine:

http://www.wired.com/culture/culturereviews/magazine/17-06/nep_essay

Many small businesses have a natural life cycle. They grow steadily over several years, flatten out and then either decline over a period of time or remain in a state of survival until the owner retires or dies. This pattern of ultimate survival will, in the future, no longer be possible. Too much competition, too many inspired people and too many great products will not just nudge a lot of small businesses into oblivion, they will give it a good old, hard boot!

However, there is nothing natural about this life cycle. Far from it! The problems that lead to ‘flattening out’ and demise are failures in leadership and a focus on short terms gains for the owners of the business, rather than following a path of sustained business growth.

The causes can be traced clearly to a number of pitfalls that business owners succumb to over time. Over the next few days I’ll be posting a series of causes. The first one I’ve written about before:

No clear purpose – With no clear purpose it’s damn difficult to drive your business towards its destiny never mind being able to rally the troops and clearly state what your business stands for. With no purpose and no common route map for that purpose, any business will struggle. Purpose gives meaning to what the company is, why people work there, why people buy its products or services and why it actually exists.

Imagine getting in a car with a group of friends and driving off into the sunset without little idea of where you’re heading. Makes a great road trip but its too risky in business, if a little stupid. If it doesn’t get you in trouble immediately, it will in the long run as your company grows and the people working with you demand it. Anyway, how the hell can you create a great team loyal and committed to you without a common purpose?

I’ve just tweeted this. It’s a great article with some superb tips.

http://searchengineland.com/all-aboard-the-twitter-train-smbs-19399

Competition is interesting sure. However, we spend far too much time watching them closely. We get sucked into copying them and then wonder why we end up in a mediocre place. Whilst we are looking over our shoulder observing their every move, we forget to plough our own furrow. Creating that new product, developing a customer experience that people find hard to match. Recruiting the best in the business or even reinventing ourselves.

And why do we then find it hard to do our own thing? Because we can’t afford to, we just got ourselves into a price sensitive marketplace as we aren’t different nor better!

Competitors, at some point, will eventually creatively swipe your idea, your latest product development or the way you’ve adapted delivery of your customer service recently. Especially if it’s brilliant.

However, creating a team of motivated people, who collectively share their intellect, values and motivation towards achieving a common purpose will always deliver that unsurpassed product, service and experience over the long term. And thats very hard to duplicate no matter how hard your competitors try.

Its one of the most significant and important things any aspiring business owner must do for themselves. It’s critical because it literally can mean the difference between success and failure. Not understanding why your business exists is a sure route to a company that lacks the passion and motivation to grow over the long term.

Pre start up is an exciting phase. Its full of ideas, brainstorming, hype and innovative thinking, but ultimately, the wrong idea can mean it never really gets started. The challenge is to start something that will fuel your inspiration. There are millions of (slight exaggeration) web design agencies, jam makers, landscape gardeners, software developers, interior designers, printers, estate agents, coffee shops and consultancies of one type or another. I could go on. The market is flooded and you need your life jacket before you start!

Instead, start a business that taps into your values not your ego. Consider a business that brings out your character not your persona. Be motivated by your passion not money and create something that has true meaning to yourself. Start something interesting. Start something that is going to make a difference to people’s lives.

Most customer needs are being served already. You don’t have to look far to go and buy a book or get your haircut. There are some real business challenges out there that can still afford you a good life yet at the same time contribute to solving some real problems. A start up business that helps reduce poverty, restores the environment, improves the health of others, develops people, and supports the eradication of discrimination. There are many more.

Creating your own wealth alone, we know, does not necessarily provide personal happiness. But making a difference to other peoples lives can, intrinsically for them and you, be a whole lot more meaningful and satisfying. Are you following a fake path or a path of meaning in your new start up?