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junio 09, 2009

Are You Leading an Imbalanced Small Business?

Are You Leading an Imbalanced Small Business?

Chaitanya Sagar

CEO, p2w2.com, Small Business Trends

Summary

Who am I kidding? A small business is, by definition, imbalanced. Because 80% of all small businesses (i.e. defined as businesses with under

Who am I kidding? A small business is, by definition, imbalanced. Because 80% of all small businesses (i.e. defined as businesses with under 100 employees) have fewer than 10 employees and as many as 50% have fewer than 4 employees.

But what do I mean by imbalanced? A business needs the following to run:

  • Sales and marketing - fetches business
  • Operations - services the client
  • Support - accounting, human resources, etc.


In a small business, where the owner usually sells, serves customers and does all the support work, it creates imbalance. You tend to focus more on some and little on others.

OK. This is what I mean. If you have a car that has one side of the front wheel which is twice the usual size and the other three are missing. Where can that car go? Tomorrow, you have the two hind wheels but the front wheels are completely missing. Do you know what I mean?

What can you do to reduce imbalance?

There are 3 main steps to getting your business in balance:

1. Create On-demand Structure
Small business revenue stream can be lumpy. You have too much today and too little tomorrow. You want to be able to even it out a little. It means that you should be able to tap into on-demand structures — such as knowing others who deliver similar services as you and having an agreement with them that you can refer/assign them some work (and vice-versa).

2. Hire Multi-faceted People
Small businesses need multi-faceted hires.  When you hire, make sure the candidate can handle more than one activity. That way, you can utilize them for multiple activities.

3. Outsource Non-Core Activities
It might be a cliché but it makes sense to outsource non-core activities. It is difficult to get quality providers who understand your business and support you but yes, that’s who you are looking for.

Let me go back to the car analogy. Of course it’s not necessary that all the “tires” of your business are of equal size.  But they do have a proportion. And your business has to have that function in that proportion. If not, it will result in a situation where your front wheels are a few kilometers ahead of your hind wheels!

 

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About the Author: Chaitanya Sagar is the Co-Founder and CEO of p2w2 (for PeopleToWorkWith), which helps small businesses outsource services like business and financial planning, software, virtual assistance, and research. p2w2 focuses on bringing quotes fast from professionals and giving the right information to make an informed decision. p2w2 also helps build relationships with vendors so you can focus on your business. Chaitanya blogs at p2w2 blog.

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