The SBA says that in the last decade, the small businesses of America employ over half of all private-sector employees and created up to 80% of all new jobs annually. Hats off to you, the small business owner for that accomplishment. We certainly need you in today's economy.
But yet in the same breath, being a small business owner is very risky. In fact, government data says in recent years for every 10 companies with payrolls started in the U.S., eight close. The question is why do so many close? I suggest we should provide more support to American small businesses in form of training, financial incentives and access to capital from our banking system. But also small businesses need be aware of what big business is aware of - some basic business trends they can watch to help monitor the health of their own business.
Most small business owners monitor the cash of their business, the numbers. This is a good thing. I hate to hear one of my clients say at the end of the year, "where did my money go?"
Business owners need to pay attention to the numbers but there are other pointers they should pay attention to also. These indicators are not as easy to track as the money but are no less important.
One area is employee morale. This indciator can be a very important one for small businesses as they depend on their employees for first impressions with customers, work quality and performance. If you have unhappy employees, eventually you will see a dip start in your sales. As a business owner, you can talk to your employees about how they feel about the work environment. Typically, as the owner, you are not that far removed from all of your employees and having a conversation would be a good thing. But if you are uncomfortable with this method, try watching them and seeing what their actions tell you - look at body language, listen to the informal talk going on and check on performance.
You can't afford to have poor employee morale because it spreads to other employees and like an infection, you have to treat it sometimes in a not so pleasant manner. Research shows employees want to do a good job and work in an environment that empowers, engages and trains them. So take some time and have all staff discussions, show them where you want to take the business and the role they play in it and where necessary, encourage them to participate in trainings and create a culture of customer focus where both the person buying and person selling are seen as your business's customer.
The second indicator to watch is how is the marketplace changing. We all have been told to change with the times. I know I often talk with my father about how times have changed and why I do what I do when he did not have to at my 46 years of age. As a small business owner, you need to be consistently looking for information leading you to make the right decisions on your customers, changes, products and your business's future.
Also doing some internal looking is good. If you notice your referrals are down, it could be a sign of customer dissatisfaction. So go talk to your customers and find out why. Check into your competition to see what they are doing differently and then make changes to your plan. You know what happens when you assume - so don't do it. You might look into your customer service policies and make changes there from what your own customers tell you or your competitive intelligence tells you. Don't be afraid to change things up in your business.
A third area is to revisit the business plan you hopefully wrote when you started your business. This is a living document and should be revisted and updated annually or more often depending on your business. As humans, we tend to stick to plans once they are written down. If they remain in our heads, they don't seem as real to us. For example, I wanted to start this blog several months ago but it never happened until I put it in my to do list and now I work hard to have a new entry every week - but not before I wrote it down.
Also a business plan helps you see what is important and not get lost in the every day hustle and bustle of just running a business. You don't want to be quilty of spending 50 hours a week doing day to day operations and spend less than 10 hours a week trying to steer the business, attend to employee needs and think about the future of the business. You have always got to stay looking at how you can improve and plan for changes.
The final area to watch is your attitude as the business owner. You went into the business because you had a passion for the business. Have you noticed it slipping, you not enjoying the customer interaction as much or do you bury yourself in your office to avoid dealing with employees? Your attitude is what sets the example for your employees who interact with your customers who provide you with a reason to be in business in the first place. Do a look at yourself and see what could be improved? Heck if you are still as passionate about your business now as when you started it, then you found your calling and share that passion with others. It is good for the soul.
Well let me know what you think. Share your thoughts and opinions and let's get talking about small business in Southeast Missouri.