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10 Habits of Successful Small Business Owners
With over 35 years of working with small business owners Mazars advisers have identified several habits common to successful business owners.
Managing a business can often resemble a juggling act with a seemingly never-ending laundry list of things to do. With over 35 years of working with small business owners Mazars advisers have identified several habits common to successful business owners. We have listed the top 10 habits we witness to help you compare and contrast with the view to adding a few more good habits to your schedule.
1. Stay focused
Managing a growing business requires clarity of purpose at the helm – it is important to be highly objective and focused on a few key objectives that are imperative to driving the growth and performance of your business. Maintaining a level of perspective (often gained through non-business experience, study or an adviser independent of the business) helps you remain rational when faced with fluctuating results from business decisions.
2. Pick your A team carefully
There are many reasons people become involved with growing companies as owners, investors, key employees or advisers – they are driven to accomplish, eager and capable to contribute. Your A Team needs to be comprised of people who consciously agree upon and contribute directly to the growth and goal achievement of the business.
3. Customers in the driver's seat
The clarity of purpose is 100% aligned to fulfilling the need of your target market. As your audience changes over time, so does the nature of how you deliver and market your products and services to them. Successful operators have their fingers on the pulse of the customers' buying behaviour, they predict changes on the horizon and responds with a change of direction accordingly. They embrace customer centricity.
4. Make a written commitment
Put the plan on a page and make it time-bound. The key focus of the business needs to be cascaded down from the helm to the team to ensure accountability and alignment of resources and activities. Each team or Manager needs to identify the important things they each have to focus upon in order to achieve the bigger business goals. Review progress towards these goals regularly and reset them once achieved.
5. Recruit experience
Surround yourself with quality people who compliment your skills and who have proven records of success at doing what needs to be done. A good indicator of how a person will perform in the future is how he or she has done in the past in the same or related activity - do your research. Harmonise the values and capabilities of a new recruit with your blueprint of success for your business.
6. Constantly motivate
Most people have alternative off-the-job ways of utilising excess energy or talent. Channelling such excess into activity beneficial to the business requires a tailored approach to each individual. First, ensure that there is understanding of the minimum results to be achieved. Then, for performance above the minimums, forms of compensation important to the performer or in some cases, teams of performers, must be awarded. This not only works to the benefit of the business, but also helps push individuals to do more and grow more.
7. Focus resources
Businesses that concentrate their resources in a select market tend to have a stronger competitive advantage than generalist businesses. This often leads the business to being more nimble and opportunistic to growth opportunities. Concentrating all available resources on accomplishing two or three specific operational objectives results in progressive achievement and prioritisation of the best activities to apply your limited resources.
8. Show me the money
Cash flow is the life blood of a growth business. A business’s ability to continue is determined daily, not at the year-end, by the contents of the bank account rather than the financial statements. Keeping money in hand or readily available for both planned and unplanned events is not only prudent but also necessary in unpredictable times. Project, monitor and conserve cash and credit capability. Make cashflow everyone’s priority.
9. Grow responsibly
Bigger is not automatically better, more is not necessarily merrier. Growth requires working capital, so expand methodically from a profitable base with one eye firmly on how you’re funding that growth. Seek logical, incremental extensions of existing activities avoiding a growth for growth’s sake psychology. Increasing customer dependency on your business ensures sustainable growth.
10. Test your plan
Anticipate continuous external change by regularly testing whether your current business plan is suitable for the future. The past is not always the best indicator of the future. However, learn from past mistakes, and keep your mind open to what the future may hold in your chosen markets. Actively seek ways that your business plan can turn a current problem into a future opportunity.
We encourage you to consider adopting one of these habits to help your business to achieve future growth. If you need assistance in making it happen, speak with your usual Mazars adviser or our Business Advisory specialists, John Kotzur , Tim Taylor or Matthew Beasley on +61 7 3218 3900.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.