Sharing 7 Pitfalls of Small Business Owners. Last night I informed a consulting service client that I will be withdrawing from offering services to them. It was a difficult decision, but it was the right time to take that call. Prolonging the inevitable would have spoilt the long-term relations. This keeps a window open to work together on some later date.
I know this will happen again as the reasons for taking this step are common, especially in small and medium organizations run by individual owners. This has prompted me to share these 7 pitfalls of small business owners. Be aware to avoid them. (Not all of these apply to my client, who I let go.)
Table of Contents
Not giving enough time to the business
Surprisingly, small business owners can be tied up with multiple businesses or commitments to understand the micro functioning of their business, working on improving processes and culture, and learning about leadership.
Micromanagement
The opposite end of the spectrum are business owners who wish to micromanage everything. At the start of the business, when the team is small and you cannot afford ideal skills and experience, business owners tend to be involved in everything. Over a period, you start feeling that nobody is good enough, so everyone needs to be micromanaged. This continues even when you have an experienced and skilled team.
Too much dependence on one or two individuals
To pursue other interests, small business owners tend to make favorites. Within a short period, they become so dependent on these individuals that imagining the day they leave gives them nightmares. Such favoritism creates a toxic culture. These individuals start behaving on their whims, get arrogant, and have their own favorites. They wield so much power that others are scared to share opposing opinions.
Not focusing on product, but only on selling
When business goes down, there is desperation for selling. Many small business owners are unable to look within to see that the situation is often because of problems with their product (or service). Lack of quality, innovation, pricing, service, and even limited knowledge of competition can make a product unsellable. While selling hard can help in the short run, it can be damaging to client relations if you overdo it. The desperation can affect honesty in selling, which the customers can see. Often sales and product departments have no connection or exchange of thought, then how will the business know what is more important to fix?
Looking for a scapegoat
Small business owners tend to overlook their role in any difficulty a business faces. The problem may be in the product or culture, but the business owner may just be looking at specific functions to find faults with: sales, quality, customer service. Many a times the function that the business owner is optimistic on to get the business out of trouble becomes the function most targeted by them.
“If only they did their work right.” “They aren’t doing enough.” Instead of a function/department, even individuals handling key roles can become targets in desperate situations. I have seen business owners even making blanket statement about everyone, when they cannot find a scapegoat. “Nobody wants to follow processes.” “Quality of the output of the entire floor isn’t good enough”.
Having unreasonable expectations and targets
Small business owners can be in ‘lonely at the top’ situation, with nobody to discuss important decisions. With their own limited knowledge on many such matters, they can be under pressure to take decisions, nevertheless. Many such decisions can be wrong and create unreasonable expectations from the team. There is a new epidemic in business circles, of motivational speakers pumping up the adrenaline to dream big.
Not investing in learning
There is hardly any small business I know that invests enough resources on continuous learning. Learning, if any, is very specific to the hard skills required for producing a product. Buy a machine, train on it, and start producing. Learn a software skill, and then start producing. Very little is done on soft skills, culture, and wellness.
Conclusion: 7 Pitfalls of Small Business Owners
I hope the above list of 7 Pitfalls of Small Business Owners is a handy tool for small and medium enterprise owners to introspect and see their own role in the rise (by avoiding these pitfalls) or decline of their organization.
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