Small to medium size businesses are more powerful than they think they are. In recent years, this truth has become amplified. To explain, I’m starting an ongoing series of blog articles under the title Small Business Tips.
Interestingly, all businesses – small, medium, or large – can benefit from most of these ideas shared here. Large businesses can benefit exponentially. But, small businesses are most likely to benefit. Large businesses are least likely.
The subject of this first Small Business Tips entry begins to explore the reasons why this is true.
Businesses Want to Grow
Every small and medium size business wants to grow. They want to be bigger. What exactly bigger means is a subject for another article, series, and/or book. Regardless, and whatever the definition of bigger, business owners as well as managers and team leaders will point 9 times out of 10 to needing a) more staff or b) more money to meet their goals.
We’ve all been guilty of this at some point. The same is true whether you manage a nonprofit or a department in a large company. It’s easy and convenient to explain things not happening as either the result of not enough people or not enough money.
But there’s a problem. Mo’ money = mo’ problems. It’s true. And, with every new brain or pair of hands come new challenges, including management and administrative burdens. You may be good at making widgets and have more widgets to make than you can handle.
When you add another widget maker, you’re now a widget maker and manager.
And guess what? Good widget makers don’t always make good managers.
You’re surprisingly likely to find that adding another widget maker – along with the associated burdens they bring – doesn’t mean 2x the widgets. It may mean 1.5x or even 1.25x.
Now, add two more widget makers. Things just got even more complicated.
The Catch-22 of Being a Small Business
Almost every small or medium business situation I’ve seen illustrates this paradox:
- Larger businesses have resources, but they don’t use those resources efficiently.
- Small businesses run efficiently, but they don’t have the resources necessary to scale that efficiency.
And the cycle continues: As the small business gets the resources – either by credit or good business practices – they grow, get bloated, and become less efficient.
In the end, small businesses are more powerful than they think they are. Why? Because they can usually leverage resources far more efficiently than larger businesses.
A Hypothetical Business Scenario
Let’s say Large Business “A” and Small Business “B” are in the same industry and each given 100 resource units. The resource units gradually expire over time.
“A” puts a team together on how best to use these resource units. Meetings are scheduled for the team members. One team member is assigned to present on past uses of resource units and lessons learned. At the follow up meeting within days, a proposal is made on use of the resource units. A decision follows, but there is a chain of approval.
The proposal runs up the flagpole and gets approval from all but one of the decision makers. Feedback is provided. It goes back to the team. Adjustments are made. It’s goes back through the chain and receives approval within days. By this point, some resource units have expired, but they move forward knowing they have consensus.
They commit and schedule an upcoming meeting to check on the use of resource units.
What does “B” do? They receive the resource unit news. Because there are only three involved in the discussion and rollout, they have few choices. They put the resource units to work. The result is less than perfect. They find within days that there is room for improvement in their resource unit rollout, so they huddle up to diagnose the problem.
They adjust course and also schedule a meeting to check up on the use of resource units.
If both “A” and “B” each face another hurdle in their resource unit rollout, who is more likely to quickly address the issue? Both groups act responsibly within the expectations and parameters of their organizations. But, which is making a more efficient use of resource units? If both rollouts result in zero financial gain, how will human nature affect the aftermath?
The Small Business Tips Takeaway?
Whether a small or medium size business, here’s the takeaway: Stop thinking about what you don’t have. Start thinking about what you do have.
Do you agree or disagree with the above? What are your ideas and answers? Tell us below.
