This statistic resonates with me, but for the wrong reasons. That’s why I keep using it as it highlights a point.
In this country, nearly 80% of SMEs fail. It’s a dire situation when the backbone of our economy, small business, seems set-up to fail.
But here’s a truth bomb. The fail rate of SMEs has nothing to do with the market, competition or even coronavirus. Failure has everything to do with the leadership of that business.
In all industries there are customers to be had and money to be made, but when an SME folds the excuses are rolled out.
“Our idea was too early to market. Customers didn’t understand us”
“External factors weakened our industry and as a result, we suffered”
“Our competition didn’t play by the rules and we lost out”
While there might be some relevance in these statements, it needs to be said with reality. An SME fails because the owner/s doesn’t take responsibility for their actions and moves away from their end goal.
Ultimately, the near 80% failure rate could be reduced significantly if SME owners were to refocus how they operate.
Keep It Simple Stupid (KISS)
The KISS methodology is not new but it’s relevant. This methodology was developed by the US Navy during the 1960s and was designed as the Navy believed systems work best if the process behind it is kept simple and not over complicated.
It’s hard to argue that idea. Although, I see so many owners trying to reinvent the wheel because they believe their idea is so revolutionary and requires a unique approach to operating their business.
While many of the people in business I deal with have great ideas and some will affect mass change, most are not revolutionary enough to warrant a complete change in how businesses are successfully run.
The Navy may have coined the ‘KISS’ phrase but it was in operation well before the 1960s. In fact, it was Albert Einstein that stated:
“The definition of genius is taking the complex and making it simple.”
Interestingly, the KISS acronym also stands for "keep it short and simple" and "keep it simple and straightforward".
No matter which interpretation of KISS you prefer, its essence doesn’t change. In order to achieve or succeed, you need to avoid executing strategies and tactics that are too complex.
Don’t make your business too complex
How often do you look at a situation in your business and feel defeated by the task before you’ve even begun?
If that’s you, the task you face has been over complicated.
Here’s what I mean by that.
One of my clients has an amazing service offering. She entered business because she’s skilled at what she offers and has a tangible solution to what most people struggle with.
Yet her rate of securing customers was low, very low and it was defeating her (to the point where she was about to give up).
She would front up and pitch to potential customers who were her target market and they agreed they needed help. After her pitch, her potential customers remained noncommittal and that would start a longterm game of trying to convince them they needed her.
After dissecting her processes with her, we realised one small change was needed.
She was fronting up to these businesses telling them her offering can do X, Y and Z (which it can) and then asking for what they needed. While these businesses knew they needed help, they didn’t really know in what capacity.
Together we worked to develop monthly package offerings which draw together the elements these businesses need (based on her conversations with potential customers). So, instead of potential customers having to step back and think hard about what they needed, we’d done the work for them.
In effect, we’ve reduced the complexity around her offering so she can pitch with confidence about what will be achieved by her service across the month.
And the change has worked.
Within a few months traction around her offering has skyrocketed to the point she’s currently onboarding new full time staff to handle the influx of new business.
KISS has done two things in this case.
Allowed this business owner to sell more and enabled her to scale her business because she now has a standard customer offering each month and that’s easier for staff to deliver.
Take action and get shit done
What the aforementioned example explains is how keeping things simple in your business gives you the ability to actually take action and get things done.
I’m a believer that done is better than perfect in business. You can always refine later, but that can only happen if it’s been started previously.
By nature, SME owners are the type of people to be action-orientated, but that doesn’t necessarily mean they take action quickly enough.
Business is now ever-evolving. The internet, social media, globalisation have all moved the goalposts for SMEs and that means to survive, an SME needs to take the right course of action.
If they don’t become smarter more nimble operations will take over - just ask Holden.
Identifying the right action to take comes down to three key themes:
It’s from here that your business can build and you can scale via customer volume and more product offerings.
Here’s how each of three key themes played out with my client.
One good product or service to offer: after doing the groundwork, my client realised her target market needed what she had but didn’t understand what they actually needed from her services. Was it a full suite of services or just a few? Working with her, we knuckled down to identify what her potential customers actually wanted and needed and turned her offering into a product that can be sold time-after-time on repeat.
One good market to target: as the Americas like to say “there are riches in the niches” and after serving up a monthly product offering, it became clear that there was real interest and uptake from a certain industry. Now, my client is looking to specialise in one particular industry and wants to be known as the go-to person/business in this space. This represents a major opportunity for her and one that inspires her.
One good customer: It’s well known that one good customer is better than 12 that are average. Now that she has a product to offer that she knows how to target this industry, identifying quality customers becomes much easier. It’s not to say she can’t help others who fall outside of her target market (and she does) but she knows who she wants to work with and it’s producing great results for her.
For most people, it’s not how much money you make that determines success in business. It’s how happy you are doing what you do. And that’s the greatest takeaway from the example I’ve used in this blog.
Money has become a byproduct of her increased happiness in her business and that’s been possible because she was prepared to simplify her entire business.
My client was at a crossroad. Her business was confused and too complex and she was ready to quit. Nobody could have blamed her if she did.
It was true nothing was working despite her hard work, but what she was prepared to do was work out other ways in which she could succeed.
With a little refocus and an understanding of how to decrease complexity my client is starting to dominate the industry she wants to work with. In business, that’s powerful.
I wonder how many of the 80% of SME failures took a similar approach to my client before it was too late?
My guess is too many were rusted-on to what they thought was going to work and never had the vision to reduce the confusion around what they do for the betterment of staff and most importantly customers.
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