In the previous blog, I set out the four main types of business type and promised more detail on what defines each, why to some extent you are that way, and what you might do to change that. There is some overlap between types, but overall, some characteristics dominate. We will start with Survivors.
Survivor characteristics
Survivors are probably the largest group by number, and contribute to the overall wealth of the country, but less for themselves, as they tend to have low income goals, are not risk takers, have poor management capabilities and are poor decision takers. They are hungry for advice, but seldom implement.
Is this you, and why are you like this?
Quite often, you had poor employment progression, so start a small business. You may be technically proficient, and might start a business because you think you can do it better than your boss, only to find there is much more to it than you expected. With little management training, you pick things up as you go along, which inevitably is piecemeal. You expect a rational world, with only a small series of defined steps to achieve a goal. You seldom test your assumptions, which are frequently wrong – assumptions often are, it’s not confined to you. With setbacks, you become risk averse as you husband resources so as not to waste what is left, and expect that the next management book, tip or fad will provide a solution to your problems. As your context is not the same, it rarely does, or involves too much effort so is only partially implemented leading to failure and disappointment. This is summarised in the SWOT (Strengths, Weaknesses, Opportunities and Threats) section below. The day to day work of the business has made you lose sight of your reasons for starting – personal objectives and business ones are no longer aligned. It often feels that the business has taken over.
SWOT
Strengths
You work hard at what you know, and your strength is in the technical area of your business.
You are keen to learn and make the business better, often because you risk averse. This is not always a bad thing – the concept of the entrepreneur as a big risk taker is a myth.
Weaknesses
You know that you don’t know enough about other areas of the business – whether financial, marketing, people and maybe some others.
You may feel that you lack expertise in managing and growing the business, especially if your background was one of employment in a technical capacity.
You don’t cope well with the uncertainties that you encounter. You often look for the next good idea, without expecting problems. You think in a straight line way. You have difficulty evaluating risks, so avoid them.
Opportunities
You are able to shift your perspective. This is not to be understated – your appetite to try new things is good, but you may need to commit more resources and be more persistent to achieve results.
Threats
Your aversion to risk may lead you to miss opportunities for growth and profit.
As your route into business may have been imposed on you, you may feel that you lack the expertise of some competitors who are better established.
Common pitfalls
Failure to implement – people who are risk averse tend to start a new project but fail to carry it through as costs, or time and effort increases. Which really means failure to plan, or plan for the unexpected.
Trying to do it all your self – cheaper isn’t always better. For any new task, you will be slower than an expert, and opportunities will go begging as you learn. Also you have a business to run. A common complaint is that you never have enough time. You tend to focus on cost, as you can usually control that, instead of opportunity for more income. Cutting resources too much leaves you unable to take opportunities to expand.
You expect with one leap to be free of all your problems, but that never happens. As you have limited resources (perhaps through focusing on costs), you need to take baby steps, and measure results.
Identifying yourself completely with the business brings both benefits and issues. An obvious benefit is the care and attention you take. A possible issue is aligning your risk profile with that of the business – whilst you can be risk averse, you might allow the business to take a little more risk so that your personal objectives might be better met.
Trying to be all things to all men – competing with the big boys across every area is very hard. You can end up being not quite as good as all of your competitors in every market.
Development routes
Work hard to change your outlook by identifying and exploiting positive developments in the business. Concentrate on what makes you different, not necessarily better, and exploit that. Measure the inputs and results. If it works, do more.
Be a little braver! It’s OK as long as you measure inputs and results. You will know whether to push on or stop and can rest easy that you are in control.
Improve your knowledge all the time. Do this by asking people who know more – professionals will often share their time and knowledge with you, especially at networking events and seminars.
Form strategic partnerships. Firstly, with non-competing but complementary businesses for cross referral and so that you become known as the “go to” people.
Get in experts to do the things you don’t know how to or haven’t time to learn. Ensure they transfer enough of the knowledge so that you can do most of that job next time yourself. You will still have to refer to them for some things, but you will have increased your capacity and ability to change quickly and become an agile business.