How to navigate owning a Small Business
The SME Sector is the most important sector. Why? According to the World Bank, the SME sector accounts for 90% of businesses worldwide and approximately 50% of all jobs. A total of 40% of the GDP across the globe comes from this sector.
The pressure of owning a Small Business is immense and there are thousands of small business owners who are struggling to make ends meet and jump through all the hoops they're meant to.
The stress of it all is extremely overwhelming however entrepreneurs are a special breed and have that unique ability to bounce back.
Every entrepreneur with a small business once had that burning passion for their good idea and eventually starting a small business of their own. The difficulty lies not only within starting a business but being able run a business and grow it in the longer term.
The SME Sector is one of the most important sectors and a backbone of strength for most economies including South Africa.
It is the SME sector that creates more jobs and in so doing help communities rise out of poverty. In difficult times these communities suffer as the strain on small business can't be sustained beyond that which the small business can afford or the capital the owner and other investors are prepared to invest.
How can you manage the pressure of owning a Small Business?
A lot of what an entrepreneur or small business owner does is almost second nature however there are areas that with conscious focus would help navigate the pressure:
- Regularly check your mindset, perspective and thinking
This is a great first line response when dealing with pressure, that can help change your perspective or outlook to the point that what was once a problem can be converted into an opportunity. As the saying goes, there is nothing worse than a wasted problem. Having an unorthodox way of thinking is the only way you will break the mould, so don't be afraid to challenge yourself.
- Continual Innovation and Improvement
Use the good old SWOT Analysis. Every business is different and will have its own unique Strengths, Weaknesses, Opportunities and Threats. It is up to the owner/ entrepreneur to identify these and capitalize on them - failure to do so could mean sacrificing improvements that are needed for the building blocks of success.
- Avoid using Financing unnecessarily
Using finance facilities should be handled cautiously. Don't jump into the lure of financing unless you really need to - these should be saved as options for when the business really needs them. There are 3 main reasons you would want to use these: 1) Funding new growth with a business loan 2) Maintaining the credit rating of the entity 3) Cash flow maintenance.
- Understand your business' Financial Data
Often business owners are very busy with the day to day, to the point that they don't make sufficient time to fully understand the financial aspects of their business. Simply hiring an accountant is not sufficient, you should interact with your accountant on the financial reports sent, so that you understand your business performance and how to improve on those results.
Rome wasn't built in a day but it also wasn't built without a plan. So to ensure you are successful make sure you plan well. Planning covers everything including: day to day tasks, long and short-term goals, cashflow requirements, headcounts required to staff your business, disaster recovery, business continuity and business growth to mention but a few.
- Partner with the right people
Choose who you do business with carefully, because once the decision is made it is final and you could find yourself in a difficult position, should the business relationship not work.
You can do everything right and tick all the boxes but the one thing you can't speed up is time. Speak to any person who is successful about their journey and all the hard work it took to get to that point which they define as success.
Your success story doesn't just consist of what people can see, it is also everything that people don't see. It includes the day to day grind, the absolute refusal to give up and the unwaivering commitment to your dream and achieving success, this is what makes you. If you work hard and stay consistent then success will come automatically. Don't lose sight of enjoying the journey.
Many business owners will relate to this. The exhaustion, anger, frustration and stress of being in survival mode all the time can affect the way you deal with other people. Staying calm, cool and collected, as hard as it may be, is essential to ensuring you maintain a healthy working environment for yourself and your team. Stress is a leading cause for many illnesses, so why work hard in your business and not live long enough to enjoy those successes?
- Ensure you have the right Accountant. Tax Practitioner, Human Resource Practitioner and Lawyer
Having these on call are vital for the success of your business. They are the starting point to the building blocks of any business. Make sure you maintain good, regular communication with these professionals so that your tax and business compliance is maintained at all times.
- Nurture your customer base
Ensure you are checking in with your target customers on a regular basis. Their needs or the market could have changed and without being proactive you will find out when it is too late. Ensure your marketing strategy is aligned to their needs and remember the customer experience is what makes or breaks the business.
- Maintain a healthy work life balance
Ok so most of you would laugh at this one, as you barely have enough time to do what you are doing now. However, studies have shown that taking time off helps you achieve more in your productive hours. The rest and "filling of your cup" is essential to having the energy to continue the pursuit of your business. This is not a sprint but a marathon which requires staying power.
And just in case you forgot how important you are, just remember the impact your business and work is having on your community, the opportunities it creates, the needs it fills and take comfort in the fact that this already makes you successful.
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