Are you stuck in the vicious circle of business ownership

Are you stuck in the vicious circle of business ownership?

Any problem in business can be solved if you have enough money, people and time. Small businesses have limited resources and the central problem holding them back often seems to be how to manage without all three. Shortage of cash is the most critical, and it drives a vicious circle that holds business owners back and prevents them from achieving their dreams. 

The vicious circle of business ownership looks like this:

  •     I want to grow revenues but don’t have time to focus on it
  •     To be able to grow revenues I need more people
  •     I don’t have the money to hire more people
  •     The only way I can afford to hire more people is if I increase revenues
  •     I can’t grow revenues without the people in place

This is the seminal problem in small business and breaking out of this vicious circle is what keeps so many small businesses small. The solutions are easy to list but difficult to achieve, and the problem is that almost all of them require a behavior change in the owner. As I said earlier, the fundamentals come down to money, people and time, and I have written about all three extensively elsewhere.  

Money: You have to recognize that return never comes before investment, not in the dictionary and not in life. What that means is that breaking out of the vicious circle may mean that you have to spend money you don’t have. You will never make that decision if you view everything as a cost; some things must be seen as investments rather than expenses if you are going to break out of the cycle.

People: Putting up with mediocrity is another vicious circle that will doom you to repeat mistakes and stay in the same place year after year. It is essential that you are prepared to fire marginal performers and improve your hiring processes. When you have the confidence that you can hire the right people you will be more prepared to scrape the barnacles by getting rid of non-performers.

Time: This is the only one of the “Big Three” fully within your control, yet so many people let other people spend their time for them. Effective Time Management isn’t about building a better mousetrap to organize what you do but involves a strategic approach that leads you to control the tasks you take on. To do this, you should create a To Don’t List and eliminate the things that don’t belong in your day.

If you think about it, many business owners are working like a hamster on a wheel – what Michael Gerber, author of The E Myth, calls “doin’ it, doin’ it, doin’ it”. They are stuck in The Vicious Circle of Business Ownership and can’t break out. To do so requires a conscious effort, to get outside yourself and your business and look down on the problem from 30,000 feet.

It requires two things that many people just don’t do - running your business with better information and thinking outside the wheel. To start going down that road there are two other key elements out there for those who are ready to make the change:

1.      Develop high level Key Performance Indicators that will help you measure the five most important things in your business - and make two of those your salary and your profit.

2.      Find some kind of accountability partner to hold your feet to the fire and make you focus on the things that will make a difference in your business . Find a Peer group of business owners…..www.tabli.com is a good place to start.