I met an entrepreneur the other day who lost everything in his small business. At one time the small business was highly successful. He took a back seat, moved to a another town and went into semi–retirement. Disaster struck. His manager who he’d trusted to run the business stole everything out of the business until there was nothing left.
It’s a tragic tale that one doesn’t really want to talk about but I raise it here because it provides lessons for anyone who is thinking of going into small business ownership or is already running a small business. What could have been done in the case of this small business that was run into the ground? You can’t really come up with pat answers because it’s always a number of factors that led to a businesses demise. Even though you start out with the best intentions, putting everything in place that needs to be there, over time if you don’t remain sharp, cracks appear. If you don’t act swiftly to fix the cracks, you can quickly land up in trouble.
Here are some things to consider when deciding for yourself what is good small business management:
– Stay sober. It’s a strange rule to start out with but I always remember this one from the late Harold Geneen, an awesome business person, who said two of the biggest dangers in any business were ego and alcohol. You need a clear head to run any business enterprise with accurate information and best practice. Alcohol can blow your vision and result in making disastrous mistakes.
– You can’t expect an outsider or even family member to have the same passion you hold for your small business. If you “handed over” and there are bad intentions, you must expect that if people are in any way unethical, they will take the gap.
– Build a cash kitty – a reserve of cash that you can use when trouble hits the fan. If you are the owner of the business, you can take money out of the business and invest it not only for your pension and medical aid but also for one day when things may change. You might have to reinvest in the business. You may even be forced to shut the business down and start something new.
– Hands-on approach. A business cannot be run on autopilot. You have to have a hand in the business. It’s only perhaps when you are no longer interested in the business or need to retire, that you hand over the reins of your business to someone else perhaps with full ownership. But while the business is yours you have to have a strong guiding hand in it.
– Bad times. When the rough times happen, you have to knuckle down and ride the rough. No one is going to help you except yourself. You have to take the credit and blame for your business. It’s up to you to put your passion and energy in your business to get it up again.
Making a comeback in a small business is hard. It’s especially difficult when age is no longer on your side. But if you have the will to win age cannot be an excuse. There are too many success stories of mature people who only started out late and made a success of the remainder of their lives. The point is really all about life. If you are faced with a wall in front of you, you can either fold up, struggle and take one step at a time to climb that wall or find a breakthrough idea to smash through that wall.