Sooner or later in everyone’s working life we will all pose the question: “If I’m so good at what I do and produce good business and profits for my employer, why can’t I do this for myself?”
Then it becomes a question of confidence and – to a great degree – courage in taking your financial resources and laying them on the line, knowing that there is always the seed of doubt saying “What if I get it wrong?” But countering this, there is always the hope that you can create something which, if it is successful, can afford a better lifestyle for yourself and your family.
A small business is usually run by a few people who have to take on a number of roles, who often have a personal financial commitment in the business, and whose success depend on results, not just the time that is spent in work.
The personal bond between the owners and staff must be essentially a strong one. Without sounding trite, it must encompass mutual respect and the realisation that everyone is working towards a common goal.
There are no numbers in small businesses – names and individuals is what it is all about. And there is no room for the blinkered attitude found in large firms of “it’s not my job.”
In a small firm, staff must be flexible in their working arrangements and have a belief in the business, which cannot just be looked at as a “job”. There must be good relationships between the owner and staff, and working as a team is essential to achieve these objectives. All members of staff must be ready to take on responsibilities outside their usual functions.
And people who run small firms need to be multi-talented, flexible and very hard working. Staff loyalty is vital in small business. Customers expect a better and more personal service than they do from large organisations. Courtesy and a willingness to work are essential at all levels.
A small business owner must always be alert to market changes and be planning well ahead. Too much reliance on one large company to provide work can be very dangerous. Small businesses can adapt more quickly to the market as decision-making is not burdened by the hierarchy of a large business – this is particularly true in the leisure and tourism market place.
A small business has to value every customer. A large firm can afford to simply choose not to deal with certain customers. Conversely, a small amount of payment defaulters can much more seriously affect a small business, so care is required in that direction. The small business has to be constantly aware of market trends and anticipate demand, whereas to a large extent big firms can create demand.
The importance of the owner is paramount. Their workforce must have the confidence in his or her business skills and the ability to render decisions for the continued well-being of the firm. However, sometimes difficult or unpopular decisions have to be made – it goes with the territory. Honesty with oneself, the workforce and clients is of ultimate importance as is a well-developed sense of overall justice and an ability to laugh at oneself and be humble enough to admit mistakes.
If the owner does not make the business tick, then it will fail. The owner must know their market inside out and has to be a “jack of all trades”. The owner must have the ability to carry out an on-going assessment that what you are offering is what the market wants. Having the flexibility to change quickly, monitor customer reaction, take advice as required and keep tight financial control are also crucial elements.
The owner’s contribution and participation is vital to success. In the absence of a full, professional management team, the owner is required to take all-important decisions and is relied on to maintain morale. People-management skills are very important unless the business either involves very few participants, or has a large staff turnover and obviously the latter is undesirable.
Small is beautiful and the decisions small firms make are based on personal experience, access to market research, and advice from professional advisers. They have the flexibility to change tack to meet changing or new market needs quickly. The decisions they make in the next 12 months will directly have a bearing on their profitability and will ultimately determine their ability to continue to trade. What better incentive do they need to get it right?
They have the advantage of freedom over large firms because they have no management team, board of directors, or shareholders to answer to. They can make instant decisions and these are final. That is not to say that every decision they make is the correct one, but there is much advantage in being able to make a major decision without having to spend time consulting with others. Basically if they spot a trend, they can respond instantly.
In contrast, big business employs people to carry out specific tasks and there is often little incentive to put in more than is required within a set working pattern or to carry out functions for which they are not paid. But one big problem in a small firm is that professional advice or particular expertise is not often available in-house and has to be brought in as required.
A small business uses all of the management skills required by big business, however it does not have the luxury of appointing a specialist for each task.
A small business, by virtue of the fact that it is small, does not usually have a large marketing budget so it is essential that the owner is highly astute and precise in identifying potential markets. Large business is more concerned with corporate image while a small firm is concerned with the image, which the individual and the workforce present, as well as the products it offers.