Fluid Business Coaching is a blog where we publish content about business ownership, rapid growth, family business, ready for sale and team communication. Helping business owners and their teams implement effective growth strategies to achieve more profit, less waste, more efficient processes and ultimately a better work/life balance for the owner.
Understand what differentiates a successful growing business from an out of balance stressed business to get massive results.
In a given situation what will have the most significant impact on the profitability of your business.
For many small and medium sized business (SME) that factor is the experience of the business owner.
Is your experience the key to balanced growth in your business or is there another factor which when applied will springboard your business to the next Level?
From working with hundreds of successful SME business owners over the last fifteen years the key, the Multiplying (X) Factor, is UNDERSTANDING.
Finding the Difference
Let me explain by giving an example.
For many years I enjoyed driving my fun car on track days at racing circuits around the country. As an experienced driver I thought it was just a matter of applying those skills to go faster. So, I attended training courses and built lap experience but my performance plateaued as I reached my limit and I could not go any faster.
Frustrated I arranged with a small group of similar car nuts to have a day to help us all go to the next driving level.
Rather than a race circuit we went to a disused airfield and our instructor for the day set out a short circuit with cones.
The first test was to drive a few laps and record our fastest time.
We were good!
Our instructor then did a few laps in each of our cars and of course effortlessly smashed our lap times.
Totally deflated, he then took us to one side and with the aid of a cut down tyre explained how a tyre worked especially at speed and at its limit of grip.
We all had immediate light bulb moments, it was so clear, so simple, so obvious. Now we had the key to massively improve our lap times. We UNDERSTOOD what we had to change to get so much more from our experience.
As soon as we were let loose again on the cone circuit we all smashed our previous best times on the first lap. As we put our new UNDERSTANDING into practice we smashed our lap times by 40%.
We now had the key, that X factor, to drive faster and indeed safer.
Our experience was no longer our limiting factor. We understood the Multiplying (X ) Factor and could replicate the improvement to continue to reduce our lap times, every time.
Even better we could also pass on this X Factor understanding onto others to unlock their potential, multiplying their outcome again and again.
It took a moment to understand but to get massive improvements it had to be applied.
Only when I understood how to apply the X Factor did I get the Multiplying effect.
Like my driving, I meet many owners whose businesses have reached a performance plateau.
They know they can go faster (Grow) but no matter what they try they have reached their limit. They don't have the key to unlock their experience to make that step change.
Today, there is a dearth of knowledge and information available on line that is at the end of your finger tips BUT without the key you can't apply it.
It has no value! It is worthless!
BUT, find and understand how to apply your X factor and you will multiply your results.
This week, we're throwing it back to episode 066 where Ray Moore and Andy Sleet discuss who is controlling your time? Ray and Andy look at who is setting the priorities in your business and those of your team. Surely the answer should be you. However external factors, such as email are often controlling your time more than you may think.
Let us know what you thought of our podcast and please leave us a review on iTunes. We love to hear your comments and feedback!
In the life of every small or medium sized business (SME) there will be events that the owner has not encountered before.
Here's a quick look at five of the common one-off business events where relying on past experience may jeopardise the future of an SME.
I regularly speak to SME owners who have successfully built their business over 10, 20, 30 or 40 years.
Rightly proud of their success they feel that they have seen it all and can rely on their experience to successfully face the future.
Typical responses from SME owners are:
“We have been really successful to date, so we must be doing things right”
“I’ve got 25 years’ experience, so I know what I’m doing.”
Reliance on experience can create a dangerous Business Comfort Zone (BCZ) which blinds the owner to possible dangers as well as opportunities. The BCZ creates a ‘wait and see' approach leading to reactive knee-jerk responses rather than a proactive, considered approach to face these new events.
How, when and what the owner’s strategic response is, will have a significant impact on the future of all the business’s stakeholders.
1. SME Succession
The most common unplanned event for established SME is succession. A typical response is “I don’t have (want) to worry about that yet.” However, in every business there will come a point when the transition of leadership/ ownership will have to be faced.
Succession happens in every business. It should be a planned process rather than a disruptive event. For most SMEs this will occur only once in a lifetime and is not previously experienced by the existing ownership.
Way outside that BCZ.
But it will happen. Guaranteed!
It will either be to the next generation (in a family business) or by sale to a third party/management or by The Official Receiver!
2. Sale of SME
Similarly, an approach by a company interested in purchasing the business can be totally unexpected.
The approach is either rebutted or the opportunity wasted as the business is not ready for sale. Once again for most business owners this may be a once in a lifetime opportunity and not experienced before and outside that BCZ.
The strategy of building a business that is always ready for sale has just not been considered as an option.
3. SME Increased growth rates
The BCZ lulls all concerned into expecting steady year-on-year growth based on regular business from loyal customers. Opportunities to enter new markets or new products which can result in off trend growth may be ignored or squandered.
The experience has been to add resources in response to sales. A strategy of playing catch up and relying on the goodwill of existing customers has worked but there will come a point where it is necessary to ‘Set Out the Stall’ to sustain the growth. (See point four, below).
4. Transition to a medium-sized business
In my book ‘Can Your Business Step Up to Growth Challenge?’ I focus on the challenges of a growing business transitioning from a small to a medium sized business. The reactive rules of running a small business when applied to a medium business will result in stress as the four drivers, Time, Team, Money and Delivery are forced out of balance.
Reliance on experience i.e. working harder or throwing resources to rebalance the drivers will not resolve the stress in the long term and will only magnify the issues in the short term.
5. Disruption in the market
How to handle a major disruptor in the market by its nature cannot be viewed through the experience filter. The change will have a fundamental impact on the trading of the company and past solutions will not apply.
The owner must apply a different way of thinking to deal with the new market conditions. What worked before may not work in the future.
These five examples are by no means every possible significant events when new thinking needs to be applied rather than relying on experience.
Relying on hard won experience is great for handling similar situations, but will not help in scenarios way outside the BCZ.
It’s only when you truly understand your experience can you begin to leverage it’s power for the benefit of all.
What significant events have you faced in your business that your experience had not been sufficient to handle the situation?