As a small business owner, you probably have about a million million-dollar ideas floating around in your head. Problem is that while there is no lack of ideas, determining where to invest your time and resources may be an issue. Oftentimes, it is a challenge of opportunity cost: if you invest in one area, you cannot invest somewhere else.
May investors have horror stories about missing opportunities that turned into great opportunities. This article talks about 11 investors who turned down opportunities that would have netted them HUGE returns.
If we only had a crystal ball!!
While these may not be the types of opportunities you would take advantage of, there may be every day opportunities that you and your company are missed out on, sometimes, simply as a result of not knowing. Many business owners get so wrapped up in fighting the daily fires of running the business that sometimes even the basic things get missed.
A marketing firm got a very large account that would require that the owner work directly with the client on a regular basis. At first glance, this looks good. This one client would provide enough revenue for the firm to provide a nice lifestyle for the owner. At the same time, this client takes away so many resources from the Company that it is no longer focused on growth or looking for opportunities.
The downside: if the client goes away, the firm goes from feast to famine. One minute, your company is high on the hog, the next, it is in trouble. Having that one big client puts the company at a significant level of risk. The business is no longer acting like a business, but rather, like a parasite: if the company is removed from the host, or the host dies, it dies.
The solution begins with having clear understanding of what operational risks exist within the Company. A business analysis showed that the Company was lacking the infrastructure to support taking the owner out of the picture: the systems and processes do not exist that would allow the owner to be able to delegate tasks. Furthermore, the Company had no plan to manage company growth, so as service delivery becomes more complicated, the owner spends all of their time juggling projects and making desperate decisions to move things forward. Which means that if something goes wrong, the Company could be in real trouble.
Heads Down Approach
Similarly, a restaurant owner with a busy restaurant was very much involved with the daily operations of the Company. He checked the food, spoke with guests, worked with staff, hired entertainment, sold catering, ordered groceries and any number of tasks to ensure that the restaurant remained successful. Challenge was not that the restaurant could not be successful, but rather that certain types of restaurants typically have a “shelf life,” meaning that while they are “hot” for a certain amount of time, at some point, they will no longer be that. Essentially, they mature, either as a staple in the community or begin to decline as competitors enter the market space.
The challenge for a busy operator in this situation has to do with properly assessing where the company is in the cycle, and what to do next. Sure, it is relatively easy to add events, change the menu, perhaps even change décor and staff, but what are the true strategic initiatives that would propel the restaurant forward? If you have ever seen a show such as Restaurant Impossible, this is exactly what Chef Robert Irvine does.
Next Phase Planning
As with the prior situation, progression begins with understanding the current situation. However, in addition to understand the Company’s current position, a business assessment can do an environmental scan: an evaluation of what opportunities and threats exist in the marketplace. The result of the assessment would be a SWOT analysis (strengths, weaknesses, opportunities and threats).
With new information in hand, leadership can evaluate opportunities and build a business strategy to maintain or gain market share.
Business Analysis: Change
In both cases, a business analysis provides the basis for change. It gives the business leadership clarity about the Company’s strengths and weaknesses. It establishes a basis for KPI’s or Key Performance Indicators. It defines the “here” when you are seeking to move the company from “here” to “there.” It helps to define risk and gives leadership a holistic view of the company.
Consider this: if you have a vehicle that you use to get everywhere you need to be. If you monitor the vehicle’s health, you will be able to operate it for a very long time. If you do not, you will probably end up surprised when something goes wrong.
Build an extraordinary company. Know where you are and where your company is going.
Rick Meekins is the Managing Consultant at Aepiphanni, the trusted advisor for business leaders who are seeking forward-thinking solutions to help them plan for and navigate through the challenges of business growth. Our entrepreneurial multidisciplinary team works with clients to develop differentiating solutions and provide direction focused on lasting, strategic results. We exist to help our clients CREATE | DESIGN | BUILD extraordinary businesses.
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