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Thread: The Big Thing Holding Back Small Businesses

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    New Member Dirklr's Avatar
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    The Big Thing Holding Back Small Businesses

    Small businesses stay small either by choice, or because they start chasing growth in the wrong places.
    When you strip away the layers, it all comes down to darts.
    Imagine a dart board with a bullís eye and around it is a series of wider and wider circles. The bullís eye is where the people just like you hang out. They are the people (or businesses) who feel the problem your company set out to solve. They are usually your first customers and raving fans.
    The further you go outside of your bullís eye, the less these prospects feel your exact pain.
    Why do entrepreneurs go outside their bullís eye? When youíre a self-funded start-up, youíre scrambling ó just trying to bootstrap your way to a company. You donít have a lot of money to invest in formal marketing, so you rely on word-of-mouth and referrals, which also means youíre often talking to people outside of your bullís eye.
    These prospects may experience the problem youíre trying to solve, but they are slightly different (thatís why theyíre not in the bullís eye). They like your product or service but want a little tweak to it: a customization or a different version. You donít see the harm in making a change and start to adjust your offering to accommodate the customers outside your bullís eye.
    Your new (slightly-outside-the-bullís-eye) customer tells her friends about how great you are, and how willing you are to listen to your customers, and she refers a prospect even further outside your bullís eye who again, asks you for another tweak.
    Making these changes to your original product or service to accommodate customers outside your bullís eye seems innocent enough at the time, but eventually, it undermines your growth.
    Why?
    To grow a business beyond your efforts, you need to hire employees (or build technology) that can do the work. As humans, we are usually lousy at doing something for the first time, but can master most things with enough repetition.
    Think about teaching a toddler how to tie his shoes. The first few attempts are usually rough. Itís a new skill and their tiny hands have never had to make bunny ears before. You break it down for the child and show them how to master each step. It can take weeks, but eventually they get it. As adults, we donít even think about tying our shoes ó weíve mastered the skill by repetition.
    The same is true of your employees. They need time to truly master the delivery or your product or service. Every time you make a tweak for a new customer outside your bullís eye, itís like changing the instructions on tying your shoe laces. Itís disorienting for everyone and leads to substandard products and services, which customers receive and are less than enthusiastic about.
    Having unhappy customers often leads the owner to step in and ďfixĒ the problem. While some founders can indeed create the customized product or service for their new, outside-the-bullís-eye customer, they are making their company reliant on them in the process.
    A business reliant on its founder will stall out at a handful of employees when the founder runs out of hours in the day.
    The secret to avoiding this plateau, and continuing to grow, is to be brutally disciplined in only serving customers in your bullís eye for much longer than it feels natural. When you want to grow, the temptation is take whatever revenue you can, but the kind of growth that comes from serving customers outside your bullís eye can be a dead end.

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    Blurock (12-Mar-19), ians (11-Mar-19), Justloadit (07-Feb-19)

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    I see you are also in Pinetown...maybe we should get together some time and discuss to how to grow my little operations...i have been operating since 1991...I still havent got around to drawing up a business plan.

    I have just expanded another operation (not my bread and butter business) and plan to get another operation up and running again...I am having a logistical nightmare...trying to make the product as fast as i am selling them.

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    PlatinumWealth.co.za (12-Mar-19)

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    Diamond Member Blurock's Avatar
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    So True! Stick to what you know and what you do best. As soon as you start dabbling in other people's business or technologies, you will get burnt. At takes 10 years to become an expert on any skill, art or science. Years of learning and practice and just as soon as you think you know it all, the playing field changes.
    Change is risk. Political change, environment, finances, competitors, logistics, automation etc etc. But these changes are also opportunities for those who keep their ears to the ground like grasshoppers. Start jumping!
    Excellence is not a skill; its an attitude...

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    Quote Originally Posted by Blurock View Post
    So True! Stick to what you know and what you do best. As soon as you start dabbling in other people's business or technologies, you will get burnt. At takes 10 years to become an expert on any skill, art or science. Years of learning and practice and just as soon as you think you know it all, the playing field changes.
    Change is risk. Political change, environment, finances, competitors, logistics, automation etc etc. But these changes are also opportunities for those who keep their ears to the ground like grasshoppers. Start jumping!
    Some of us burn to learn.

    Since 1991 ...i have seen every single one of the companies i have done work for close...but more open and close.

    I have watched small companies manage for years...then get this big idea to go big and generally close within 2-5 years.

    There is only one rule in business...take note..."CASH FLOW"...you can have the most advanced business plan...the biggest overdraft facility...multi million rand contracts...sub contract to the biggest companies you name it...there are thick books...gigs of info in the matrix...cash flow stops so does the business....it is that simple.
    Last edited by ians; 13-Mar-19 at 10:03 AM.

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    Silver Member PlatinumWealth.co.za's Avatar
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    Quote Originally Posted by ians View Post
    I see you are also in Pinetown...maybe we should get together some time and discuss to how to grow my little operations...i have been operating since 1991...I still havent got around to drawing up a business plan.

    I have just expanded another operation (not my bread and butter business) and plan to get another operation up and running again...I am having a logistical nightmare...trying to make the product as fast as i am selling them.
    I'd be interested to hear about your ventures maybe brainstorming a little bit.

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    Diamond Member Blurock's Avatar
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    Quote Originally Posted by ians View Post
    Some of us burn to learn.

    Since 1991 ...i have seen every single one of the companies i have done work for close...but more open and close.

    I have watched small companies manage for years...then get this big idea to go big and generally close within 2-5 years.

    There is only one rule in business...take note..."CASH FLOW"...you can have the most advanced business plan...the biggest overdraft facility...multi million rand contracts...sub contract to the biggest companies you name it...there are thick books...gigs of info in the matrix...cash flow stops so does the business....it is that simple.
    Cash flow is exactly the reason why one should pay your suppliers on time. If you have a good, reliable supplier, you should nurture him/her, because over time a relationship is built that may allow you extended FREE credit. This is much better than an overdraft with high interest and fees. (or maybe a mortgage over your house) It may also be hard to replace the supplier with someone who can deliver the same good quality and service once he has closed his doors due to late payments by debtors. A good supplier may also carry stock for you, so that you can apply the JIT principle and so be able to save on carrying stock. A local supplier is someone you can talk to, someone who has pride in his product, whereas cheap imports will not afford you the same luxury.
    Excellence is not a skill; its an attitude...

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    Quote Originally Posted by Blurock View Post
    Cash flow is exactly the reason why one should pay your suppliers on time. If you have a good, reliable supplier, you should nurture him/her, because over time a relationship is built that may allow you extended FREE credit. This is much better than an overdraft with high interest and fees. (or maybe a mortgage over your house) It may also be hard to replace the supplier with someone who can deliver the same good quality and service once he has closed his doors due to late payments by debtors. A good supplier may also carry stock for you, so that you can apply the JIT principle and so be able to save on carrying stock. A local supplier is someone you can talk to, someone who has pride in his product, whereas cheap imports will not afford you the same luxury.
    I dont have any 30 day accounts anywhere...i learnt the hard way...now i only have COD accounts to get the discount ( i still for the life of me cant understand why some of the companies i deal with dont offer a better for cash...it seems volume is still the deciding factor)...this way it forces me to get deposits from customers and forces me to walk off site when the cash flow stops.

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    thanx for sharing....

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