Today's Guest Blog is written by Wayne Rivers author of "The Top Nine Reasons Family Businesses Fail And The Eight Building Blocks For Creating A SUSTAINABLE Closely Held Company."
The Obama administration’s economic recovery plan and proposed budget has lots of things for small and closely-held businesses – almost all of them bad.
The administration gives lip service to being a friend of small business while simultaneously proposing destructive initiatives like higher taxes, a cap and trade system, nationalized healthcare, and debt as far as the eye can see.
Family and closely-held business is big business. Closely-held companies create about 75% of the net new jobs in our economy, employ about two-thirds of the population, and account for about 64% of GDP. The people that own, operate and work in small businesses are the most productive segment of the middle class. They are notable because – unlike the Detroit automakers and the money center banks who, in spite of their armies of sophisticated MBAs, are at death’s door - they are NOT ASKING for a bailout of any sort.
The majority of family and closely-held businesses have low to no debt, spend their pennies carefully, make prudent and cautious financial decisions and have a personal stake in the outcome of virtually every decision made inside their companies. For them, it’s not “other people’s money” with which they’re playing; it’s theirs, it’s all in one basket, and they watch it like hawks.
I met with a group of minority small business owners a few years ago in a town hall type setting, I asked them what they needed to be more successful. They answered they needed more access to capital and for the government to do something. I said to them, “You’ve been waiting around for the government to do something for you for 25 years! How much longer are you willing to wait to make serious progress? What if you grabbed the initiatives yourselves and seized the opportunities available? Then, if the government ever does get around to doing anything material, you’ll have the best of both worlds!” The group immediately saw the wisdom of the thought, and eagerly jumped aboard the “business self improvement” bandwagon.
In the interest of self improvement, what are some tips small business owners can put to work right now in spite of a recession and a decidedly anti-business administration?
1. Play like the big boys when it comes to marketing and promotion. There are lots of companies out there right now offering great deals and products for small businesses, like Capital One , Sage Software and HP . When we needed a new logo, we at The Family Business Instituteutilized HP’s Market Splash to get a big company look and feel on a shoe-string budget. Technology like this can give a small business a virtually instantaneous brand identity so it can compete on the biggest playing field.
2. Analyze how you manage yourself and your time. Ed Bowman of W.E. Bowman Construction in Richmond, VA, kept a time log for two weeks. He said, “I was letting myself be tossed around like a beach ball. Even though one of my top strategic priorities was getting some good employees on board, in reality I had scheduled no time to focus on hiring! The time I freed up now lets me find higher and better uses of my time like checking in with customers to assess their satisfaction with our work and talking to new potential customers.”
3. Review your team composition. Family businesses often have 70% to 90% of their costs in people. Rigorously evaluate your team to see if they can truly take you where you want to go. If they can’t, don’t be afraid to prune the tree! As big companies lay off workers and executives, there is a staggering amount of talent available so you can improve the quality of your work force.
Self reliance is the hallmark of successful entrepreneurs, but they still have to coexist with politicians who may not look favorably upon them.
What business owners want from politicians of any time or any party is not glib talk, style, charisma, or anything else. They want to be left alone to doggedly pursue their own ideas. They want a fair, level playing field which doesn’t single out one industry over another or use the tax code to encourage one sort of behavior over another. The atmosphere among most small business owners today is one of pervasive mistrust. They know intuitively and empirically that when government mobilizes to help it most often does unintended harm.