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Nov 27
2017

Small Business Owners Must Learn Balance

Posted by: Steve Marr

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One of the key responsibilities of a CEO is to keep the sales group and production people from killing each other.  The sales group wants to promise everything to everybody at the lowest possible price to drive up sales numbers without considering the effect on the rest of the business. This oversight particularly impacts production who must keep the promises made by a salesman.

At the same time that production people don’t want to adjust schedules to accommodate customers, they are also reluctant to look at cost saving methods to lower price and cringe every time sales people promise another price reduction. 

 

An effective CEO must referee these issues to ensure balance in the business. When sales promises too much, service delivery fails and loses customers. When production fails to adjust to reasonable changes, customers find other providers.

One of the largest challenges for a small business owner is the frequent necessity of wearing both hats: sales and production. Frequently when I work with a small business owner, I find they either get so focused on production they fail to do sales, or they are so focused on sales they don’t deliver properly. Developing a balance between these two is a critical factor in the success or failure of the business.

Don owned a very good computer repair business.  I took my computer to him on several occasions. He did the work quickly and correctly. The problem was that he had too few customers. I offered to help him with some marketing ideas that would increase his business. Normally I don’t stick my nose into somebody’s affair without being asked, but I wanted to help him stay in business for my sake.

Unfortunately Don just wanted to fix computers and rejected all marketing advice.  After year or so he closed the shop and got a job someplace else. Don fell into the category of so many small business owners who just want to do the work their way while rejecting effective marketing steps that would bring business through the door.

Randy owned an internet marketing business focusing on websites, email campaigns, Facebook, and other electronic marketing. He was pretty effective at selling and built a business grossing over $800,000. The problem was production. When he brought in a new customer, he failed to implement an effective project plan with his team to identify who would do what by when. He assigned work to contractors but did little follow-up to monitor daily progress. As a result work tended to be sloppy, late and at times missed the mark.

I worked with Randy to implement a follow-through system to manage his current and new customers. Randy’s follow-through with the new system was haphazard at best. When the phone rang he would respond to new customer possibilities quickly and perhaps close another sale. However, the sale likely led to customer disappointment in the future because of his failure to monitor the project.  Over time he lost as many customers out the backdoor as came in the front door. It began to affect his reputation and business continued to shrink. Randy simply refused to embrace the system necessary to execute the work he contracted. Later Randy closed the business and took a sales position with another firm. Likely a good idea.

In my own business endeavors I have a tendency to focus on the new, the invigorating and the exciting. I prefer to pursue new customers and would rather bring in a new client than work with the old. This is simply my nature.  Because I understand my nature, I’m better able to discipline myself to take care of the business that I have, schedule my work and understand my need to have a plan for execution. I have learned some of these lessons the hard way, but at least I have learned them.

Recently some new work came in for a business I own and I needed to suspend my sales efforts for a week to focus on taking care of new customers. I would have rather worked at bringing in something new, but I understood that unless I handled the new business effectively; the long-term prospects of the business would suffer. I simply needed to discipline myself to do the work I would’ve preferred to let slide.

In my businesses I work out a time budget. I allocate my time between different disciplines. Some days I have to work very diligently to keep my time commitments. Like most of us I tend to run to the things I find fun and enjoyable. However, this doesn’t build the business.

The CEO of a large organization may effectively keep different departments from going to war; however, in our small businesses we must balance these different demands carefully and prayerfully. Every small business I have reviewed that has not had good balance struggles. Those adopting a balanced outlook and follow-through make strides to grow their business.

One of my business ventures helps people find franchises that fit their specific interest and skill set. When working with these clients, I identify who is strong in sales. For some franchises, 80 to 90% of their success is based on strong sales ability. These are great fits for clients with skill in sales.  Others, like a food restaurant, are more dependent on the ability to operate and manage staff. I strongly discourage clients from exploring businesses that don’t fit their skill set. 

King Solomon wrote, “It is good to grasp the one and not let go of the other.” (Ecclesiastes 7:18a, NIV)  In our business ventures we need balance. The challenge comes when we must grasp the sales part of a business and then shift to the production side, all while not letting go of important work.

 

 

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