You might make great products or deliver excellent customer service but is your business acumen equally impressive?
It’s an issue that every small businessperson should address but too few do, according to Michelle Peters, who calls herself “the Business Instructor.”
“Most small businesses fail because business owners refuse to acknowledge that they need to work as hard at learning how to run a business as they do at ‘doing’ the business,” she said.
For example, she argued, someone might think that if they’re a good dentist, they can set up their own business and clients will just come to them because they’re good at dentistry. But they won’t, she claimed.
According to Peters, we need to dispel the myth that anyone can run their own business. Anyone can learn to run a business, she said, but you have to be prepared to learn.
“You weren’t born knowing how to design a product, be a dentist, or write a legal agreement,” she pointed out.
“You studied with people who knew how to do those things and had experience doing it, and then you put it into practice and kept learning every day – probably with continuing professional development training every year. So why would learning how to run a business be any different?”
A lawyer turned business consultant, she speaks from personal experience of going from employment to setting up on her own. “Suddenly I not only had to be able to do the work, I needed to be able to bring in the work, make sure I got paid for doing the work, and make sure my business survived financially whilst I was learning how to do all these things,” she said.
“Fortunately, I chose some great mentors and teachers to help me and they put me on the fast-track to learning the skills I needed to make sure my business succeeded. This was what inspired me to make my business about helping others to get the same kind of help.”
Read more on mentors:
- PayPal to mentor UK firms for third time as 6 startups complete Start Tank scheme
- Strong mentors: The secret weapon of savvy SME owners
- Me, myself and Jude – Why every entrepreneur needs a mentor
SMEs need to market their businesses, Peters believes. All too often small business owners will buy some advertising or create a Facebook page and feel that they’ve done enough.
Marketing, for instance, is really about getting the right message in front of the right audience, she pointed out. That right message starts with the ‘why’ – why your clients or customers need your product or service and why they should choose you to provide it. SMEs who don’t learn how to do that will simply be wasting their money.
SMEs owners who are good at what they do also need to think more about how to create a business model that works – one that will be profitable and can be adapted as they grow. Learning how to manage the finances of a business, such as cashflow, profit and loss, balance sheets and how to manage the staff are also things that small business owners need to focus on more than they often do, Peters explained.
She noted that SMEs need to be wary about simply outsourcing or delegating the parts of their businesses that they don’t understand themselves.
In fact, she argued: “You’re heading for disaster. I can’t tell you how many businesses I’ve spoken to who’ve said, ‘We’ve tried advertising but it didn’t work’.
“When I ask them to tell me how they decided on the content of those adverts, they say things like ‘Oh, the advertising department of the newspaper or magazine put it together for us’. So they didn’t have a strategy for the advert and they didn’t play any part in deciding the content of that advert.
“They left it to someone else who knows very little about their brand or their business, and quite possibly not much about good marketing either. No wonder they had zero results.”
But can or should a business owner really get involved in every detail of every aspect of their business? “Far from it,” she revealed.
“I’m saying the business owner needs to develop their business skills to the level where they can participate in developing the strategy for every part of their business. Then, when they give the detailed implementation of that strategy to others, they will be able to understand whether it’s being done correctly or not.”
She compared outsourcing or delegating without understanding the strategy yourself to asking someone to build you a house without having any input into its design, purpose, or cost. What are the chances you’ll get the house you want?
So if every business owner needs to develop their business skills, rather than just being good at what they do or make, they have to create a plan.
SMEs need to think about mentors, she said. “Find someone who can help you develop your strategic thinking and practical skills ‘on the job’.
“That way, you’ll build up the knowledge and skills you need to be a great business owner – with a great business – rather than just being great at what you do.”
Share this story