Why so many small businesses?
By Greg Verhoef
I attended a presentation recently where some insights were shared on kiwi businesses. The results we interesting with about 1.5 million micro business, 100,000 slightly larger SME’s and 22,000 large businesses. Almost 97% of entities had 20 or fewer employees.
While this is great to see the Kiwi Spirit of budding entrepreneurs ‘out there doing it’ it did make me wonder why it is so hard to make the transition from small to mid-sized or larger. Is having so many small businesses efficient for our economy? How many of them are just making ends meet or worse sucking the owners into the dark hole of debt?
Apart from obvious efficiencies and reduced duplication, there are other opportunities that come from having size and scale. With a wider team of staff, there will be idea’s to develop, opportunities to collaborate new products or develop specialties, take on larger projects and source the capital to invest in these opportunities.
Here are seven tips to help you break the small business mold.
Have a Plan – The importance of having a goal and some steps in place to achieve it is paramount. If you don’t know where you’re going how will you get there? Don’t be afraid to change it up often.
Team Engagement – Your team is your greatest asset, make sure you bring them along for the ride, engage them in the dream and make sure they understand the plan, seek their input and be prepared to share some of the winnings when they arrive.
Seek Opportunities – Always be on the lookout for opportunities, to be creative, new ideas, different ways of doing things, collaborate with others, merging or amalgamating to gain scalability. It may be better to be a part owner in a big pie than a big owner in a savory.
Kaizen – Adopt a long-term approach to consistently making small improvements to procedures and process across your business. Always be aiming to improve better outcomes and efficiencies.
Invest Profits and Time – So you’re in business to make some money. The question is then how much do I take v’s reinvesting in wise opportunities for the future. Make a conscious decision about how much you take from the business and how much you leave in.
Delegation – delegate, delegate, and delegate. Free your time to work on growing and developing your business not the nitty gritty day to day stuff.
Advisory Boards – Larger business have clear split between governance and operations. Not really practical in a small business but a halfway step is having an advisory board of people with various skill sets or industry experience that can help guide and advise the business owners.