The six habits of highly effective small businesses
Her Business magazine was founded in 1995 by Fiona Powell.
Her Business' vision was to inspire, inform and empower women in business.
These habits are in no particular order of importance but together they are guaranteed to save you money and produce results for your business.
Habit one: Training
Many small businesswomen start their business with just themselves as the employee, then as business grows the need develops for someone to answer the phone, to deal with the correspondence, or even make sure the bills are paid. Often this person is a friend or a neighbour who is 'thrown in the deep end', fighting to cope with daily demands and picking up the business as they go along. The owner is busy all day 'doing' the business, and the new employee is left to fend for themselves. Business keeps growing, but slowly over time the owner starts to hear of problems (if they are lucky), the customers accounts are late, or incorrect; the person taking the phone calls is rude or unhelpful; bills are not being paid. The owner may wake up to the fact that they have neglected their responsibility to their employee. In many cases at this stage it is too late for the business to be saved, customers have been mistreated, bills not paid, monies not collected, and the business fails (with the owner blaming the employee for the business failure).
In successful small businesses, business owners realise that time and effort has to be put into employees to ensure that they know what to do, how to do it and what is expected of them. How does the employee answer the phone? What are the procedures for dealing with customers returning products? What do they do if a customer wants something they don't normally stock? Being able to deal with these types of problems in an effective and friendly manner will earn your business points in the eyes of the customer. Can you really afford to leave your business in the hands of someone who doesn't know what to do, who could destroy the health of your business?
Habit two: Delegate and then Lead
It may sound like it's easier not to employ anyone else and then you don't have these problems to worry about; "it's quicker and easier to do it yourself". The effects of this will be that your business never grows because there is only one person in it - you, and you can not be in more than one place at a time (however hard you try!). If your business is to grow you have to learn to delegate, and to accept that people may have different ideas of how to do things. See this as a great opportunity to make use of the many talents in your business - your employees love to be involved and this is contagious. Just think of what could happen if all your employees loved your business as much as you do! Show them your business plan, let them know what you plan for the company, and their part in it. If you have the backing of your staff as well, how can your business not succeed?
Habit three: Work with Your Suppliers
If you are telling your employees what you expect of them - then why not tell other people who have a great effect on your business - your suppliers. Your suppliers can have a significant effect on the efficiency of your business, and like you, most of your suppliers are probably small businesses trying to make a profit. So why not help each other? Talk to your suppliers, let them know what you expect from them, let them know how they are performing. Wouldn't you want to know if something was irritating one of your customers? Try and develop good relationships with your suppliers, they may be able to extend your credit limits when times are hard. They may be able to provide you with information which will dazzle your customers. They may even be able to reduce your costs. Talk to them, it's free, it's healthy and you'll discover new relationships which can build your business.
Habit four: Cost of Poor Quality
Ask any small business woman if they want to reduce costs and they say 'yes', so why is it that most small businesses throw away money without even realising it? Running a small business is time and energy consuming, so much so that often the business owner doesn't see what is right in front of their eyes. Take a small business making cakes. For every cake put into a box, the employee throws away two boxes because they haven't been made properly. At $2 a box that amounted to $30 a day; $150 a week, $7,800 per year. In this case it took the owner almost two years to realise what was happening. Do you know how much of your product you throw away because it's faulty? How often does your supplier supply the wrong product? Getting a grip on how much money is being 'thrown' away is easy; just ask your employees. Just think what you could do with all that extra money!
Habit five: Customers
No business would exist without customers, but for your business to succeed you have to develop the habit of listening to your customers. Not just pretend listening, but REALLY listening to your customers. Successful small businesses have realised that in order to grow and fulfil their owner's dreams they have to fulfil their customer's needs, and so ask questions. "What can we do for you? What can we do better? Can we provide you with any other service? And when their customers answer, they listen and take action. These businesses realise they are providing a service and they always remember two important facts. The customer is not dependant on you - you are dependant on the customer, and the customer is doing your business a favour by giving you the opportunity to serve!
Habit six - Statistics
Statistics is a word that sends shivers into the hearts of most small businesswomen, but statistics are the life blood of your successful small business. These are not financial figures (of course they are important) but statistics that tell you exactly what is actually happening in your business. These types of statistics won't show up on your profit and loss statement but they are equally as important to your financial success, and can often highlight the problems well before your financial figures show signs for concern. These might include; the value of rework each week, the value of product wasted each week, how much product was returned or needed servicing? These are all statistics which will give you an idea of how your small business is performing, in terms even your employees can understand. In successful small businesses these measures are then used for improvement schemes - how much did we reduce our waste by this month? This habit is guaranteed to save you money, provide you with more control over your business and provide you with more choices... what to do with those extra dollars!
Originally published in Her Business magazine.
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