The elders gathered at the base of Mount Sinai and were impressed by the two stone tablets, but one had a question. “Moses, these commandments are very good, but where is the instruction book for small business?”
I spent 15 years toiling in the dealing rooms of major financial institutions, then in 1994 started my own company working in the small business sector. In the subsequent 20 years, here is some of what I’ve learnt.
1. The buck stops here
The owner is responsible for everything that occurs in the business and with complete control comes complete responsibility.
2. Just fix it
When things go wrong, and they will, the first course of action must always be to solve the problem and ensure that the parties involved know what is happening and what is being done to address any grievances. When this has been achieved, it’s time to examine the causes. Rather than immediately apportioning blame, work to adapt systems to avoid the issue recurring.
3. It’s not a job
As a business owner, you are an investor expecting a reasonable return for the risks you have taken on. You manage the business and allocate your resources as productively and efficiently as possible but don’t think of it as a job. It’s an investment decision and you create jobs for your employees who you expect to do the daily work.
Being able to delegate is an essential skill for the small business owner otherwise you’ll be too busy to focus on your strategy.
4. Have a plan
When you establish a business your bankers, accountants and lawyers will all want to see and dissect your written business plan. Blue sky projections and ambitious cash flow assumptions won’t wash. Once the business is up and running the business plan needs to be maintained and reviewed. I do this six monthly and try to take into account as many ‘big picture’ issues as possible. Too often I’ve seen plans that haven’t been fully thought through and the consequences are never pleasant. Keep asking ‘what if?’ until the potential outcomes are understood.
5. Listen
Advice comes from many quarters and good advice can be lost in the noise of information and opinion that is thrown at you. There’s the advice that you pay for from professionals like accountants, lawyers, bankers, financial planners and so on that is necessary and often contains gems. But remember that the Titanic was designed by professionals. There’s the advice from people in the industry that have been there and done that and survived and that too can be valuable.
I also like to listen to the little voices, the suggestions you hear from staff, warnings you hear from customers and ideas you read or pick up in the media.
6. Let’s be friends
I’m talking about friends in business and contrary to what many think you do have friends in business. I had one business with a competitor up the road and I always wondered how well he was doing: he would pinch my staff, put on aggressive special offers and install expensive equipment. One day I saw him in the street and asked “how’s business?” and he told me. There were no real surprises but he recommended a new machine to me which I bought. He was far more cooperative than I expected.
Industry groups and networking programs can both be helpful but taking a leaf out of the books of the two major retail chains or the four major banks you can see that they are not trying to kill each other but rather coexist happily.
7. Be honest, especially with yourself
Honesty in business can be a rare commodity so when you see it, be grateful. I find that the more brutally honest I am the simpler my life becomes. If I am honest with myself it helps with my planning. If something isn’t working, the hardest thing can be to admit it and change things but to do otherwise won’t help at all.
I also believe in running a ‘favour bank’, that is, helping others in business or as an employer in the knowledge that when I need some help it will be forthcoming. The more I put into the favour bank the more I find people will trust me.
8. Avoid jealousy and greed
It is natural to want more and in business you don’t plan not to grow. Expanding your reach and increasing your profit is the name of the game but keep this in perspective. The retail giants are unlikely to feel threatened by your presence. Greed is not necessarily good. If your aim is to run a small business, then don’t become a smaller one by trying to become too big. I have found that having more than six people reporting directly to me just crowds out the day with endless interruptions. Decisions that can be made without your involvement should be.
9. Be adaptable
Business plans like the superannuation tax laws can be changed at any time. Events can necessitate a complete rethink of the most basic plans - just ask Captain Chesley B. Sullenberger whose US Airways flight 1549 had a change of flight plan that turned a night landing in Seattle into a splashdown in the Hudson River.
10. Remember to rest
Small business takes 24/7 to a level not seen in corporate life. It really does, to an extent few in corporate life can appreciate. The difference is that not only is it your money and your business but usually it is your family and your house at stake. Now that you are self-employed you don’t have entitlements like annual leave, sick leave, leave loading etc. It is vital to remember that you are in business to improve your quality of life not to sacrifice it, so take those holidays and make time for your family.
Life as a small business owner can be highly rewarding, not only financially but because you are your own boss and hopefully your destiny is in your own hands. But the extent to which the All Ords has significantly outperformed the Small Ords in recent years shows smaller is not always better.
And since the camel traders, carpet sellers and falafel makers at Mount Sinai did not send Moses back up the mountain for the small business commandments, you’ll have to make do with mine.
Bruce Montague is Director of Exeyco Pty Ltd, and has managed small businesses for 20 years. Any religious references are for illustration only and not intended to offend.