Why Small Businesses Stay Small – The Fear Factor – Part 1
Why Small Businesses Stay Small – The Fear Factor – Part 1
Before I get into this, first let me say there is nothing wrong with being a small business and staying at the level you are happy with. There are many micro-businesses that are either hobbyist, lifestyle or run by people in semi-retirement that are quite happy to stay small. Not everyone is pining to be the next Richard Branson! Obviously, the definition of “small” can vary widely depending on your viewpoint.
This article is really aimed at those businesses that do have ambitions to grow, but just seem to be stuck at a certain level. So these are my views as to why that is.
Not having a clear vision or a plan – the fear of being successful
Now you may feel that visions and missions are just for corporates, but I think you will be surprised. Spending some time being clear about where you are heading and what you want to achieve can form the foundations of your business and make decisions easier to make; as well as keeping you focused.
An insolvency practitioner once told me that 7/10 of the businesses that came through his door that were failing had no written plan guiding them to business success. Now a business plan doesn’t have to be a tome; it could be a single page with some key objectives that you want to achieve over the next twelve months. The important thing is that you have it written down and you revisit it on a regular basis, measuring your performance against your targets to make sure you are heading in the right direction.
Not knowing who your ideal customer is – the fear of missing out
This point ties in nicely with some of the others below. Like me, when you started your business, you were happy to take anything that came up on your radar. But also like me, after time, you get a better understanding of who you ideally want to deal with and those earlier customers may not fit into the category.
The issue here becomes that you feel if you narrow down or niche the type of client you are ideally targeting that you somehow miss out. Take a website designer for example – of course they can design a website for anyone who wants one, but it would be far easier if there were a specialisation in a certain demographic; let’s say restaurants. This makes the job of marketing your business much easier as you can “speak” directly to your target audience as you will know the particular issues and needs of a niche audience and can position your marketing specifically rather than generally.
“Specificity sells” – not sure where I first heard this – but the more specifically you engage your target market, the more response you will get. This also helps to distinguish you from the competition and makes you more referable.
Not having a USP – the fear of standing out
Now unless you’re offering something really specialist to a niche market, then most of you will be offering a product or service that has competitors or there are alternative options. So how do you stand out? What is your competitive advantage that is going to have people choose you over another business?
Having a USP (Unique Selling Proposition) will help in this respect. There are a number of ways to define a USP (maybe a future article?), but some of the simpler ones are: Can you offer a guarantee that your rivals don’t? This helps reduce the risk of someone doing business with you. A local graphic designer offers a 100% satisfaction guarantee which no others in their sector do. Or can you be bold enough to claim that you are number one, or the leader, or the only in the field that you are in? There seems to be a reluctance to do this – maybe it’s a British thing?
Fear of sales
Now, this may sound odd because the only way a business is going to survive is through selling products or services right? Well, of course that is the case, but after you set up your initial business and you received some orders from your immediate connections, then the real task begins to get yourself out there in front of prospects, and not everybody is good at sales; in particular asking for the order. How to overcome this fear is an article in itself, at which point I would recommend fellow Green Umbrella guest blogger Julie Futcher of The Sales Manager, who is an expert in this field.
Fear of letting go
Let’s face it your business is your little baby, and you don’t want to let it go. So what happens if you undertake all the tasks of running a business yourself. So not only are you the boss, but the receptionist, social media specialist, bookkeeper and accountant, web developer, and so on. All of this is great and saves costs in the early days, but as you develop and only have so many hours in a day, this is going to stifle your development.
You should consider outsourcing all those functions (most of which are not your core competence, nor do you like doing them, to free up your time to allow you to focus on being the marketeer and sales person for your business. (No doubt you are looking to the stack of business cards you have collected over time or the pile of receipts that have not yet been sorted!)
So that’s it for now. This is not an exhaustive list. Look out for my next article where I will explore some other areas that may be holding your business back.
Paul Green is the founder of The Business Community. He has been an independent business owner since 2003 and loves working with small businesses; in particular family-run businesses. His experience and knowledge of over 25 years and having worked with 100s of business owners, gives you the confidence in his ability to offer business advice, coaching and training. Having experienced the trials and tribulations that face a small business on that entrepreneurial journey, he is passionate about making sure businesses don’t make the same mistakes that he made en route! He is a big believer in collaboration and encourages businesses to work together to grow their businesses; as well as offering help and support to each other for mutual gain.