2008 is starting to look like a difficult year for many small businesses but not all. Some small businesses are on track to have their best year ever. Lean years are often the perfect time to fine-tune your business so it performs well during tough times and exceptionally well when things improve.
Do you believe your business is performing at its optimal level? Are you performing at your optimal level? If not, why not? It may be that you have a blind spot something that you can't see but is nonetheless real that is preventing you from reaching your potential.
Years ago I was a banker. Over the course of just a few weeks I had the owners of two different lumberyards approach me seeking loans for their businesses. The lumberyards were both located on the Wasatch Front less than 45 minutes apart. They were relatively similar in size and had roughly the same target customer base. But that's where the similarity ended.
Lumberyard A needed a loan because it was struggling. The owner was a second-generation manager of a 50-year-old business who told me how tough the market was and how they were waiting out a down cycle. They needed capital to meet their immediate cash needs and were planning to borrow against their assets so they could get by until business improved. Lumberyard B needed a loan to expand. Its net profit percentage was twice that of lumberyard A and it needed more inventory to meet the growing demand for its products.
I spent a lot of time wondering about those two businesses. They seemed to be a perfect case study on management's impact on a business. The owner of lumberyard A had no idea someone with an almost identical set of circumstances could be thriving while he was struggling. He had a big "blind spot" that prevented him from confronting and resolving the weaknesses in his business because in his paradigm he thought everyone was struggling just like him.
All entrepreneurs have blind spots. Here are a few of the most common:
Unawareness of deficiencies: If you aren't able to identify your blind spots, or even the potential that you have them, it is unlikely that you will be able to correct them.
Unfounded assumptions: This is when you assume things are different than they really are. For example:
Do you assume your customers are generally satisfied with your company? What if they are really buying from you because they don't have a reasonable alternative nearby? What will happen to your business when one becomes available?
Do you know how you really compare to your competition, or are you assuming you're doing OK because people (at least some of the time) are buying from you?
Do you know why or if you matter to your customers? When you ask, be prepared to be surprised and it might not be pleasant.
Do you assume that people will stop buying when times are tough? That assumption can be fatal because it leads to lethargy and inaction at a time when you should be working harder than ever.
Untuned radar: Unawareness of behaviors that offend and upset those around you, including failure to listen to credible feedback, personal insecurities, condescension, foul language and lack of genuine interest in others.
Here are some simple steps to help you find your blind spots and resolve them:
1. Acknowledge that you might not be seeing what's going on clearly.
2. Invite a few trusted business professionals to serve on a board of advisors with you. Meet with them at least quarterly and share all the details (good and bad) about your business. Then ask them to be frank in assessing your blind spots and helping you address them in the future.
3. Keep score. Track what is happening with your business. If your business isn't growing, something's wrong. Don't blame it on the economy. Dig deeply among customers, competitors, your co-workers, industry groups, etc. until you find the blind spots that are causing clients to choose other options.4. Identify a key blind spot and make a goal to do something to resolve it in the immediate future. Blind spots, when discovered and addressed, are a key to thriving in any market condition. Unleash your personal power and the full potential of your business by discovering your blind spots and illuminating them by aiming your spotlight right at them.
Andy Barfuss is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at [email protected]