21/10/2014

By Robert Craven, MD at The Directors’ Centre

This is not an attack on providers of services to independent businesses.

It is more a clarion call, representing the views of the various sectors of the independent business community: the start-ups, the micro-businesses, the owner-managed (1-10 employees) and the owner-directed (10-300 staff). These divisions are relatively arbitrary but I do think they reflect the different needs of the different sectors of the community.

Fed with a relentless diet of the Apprentice and Dragons’ Den, the start-ups, micros and owner-managed businesses are the most vulnerable. They don’t know what they don’t know; many are needy: they don’t have the resources or experience to know right from wrong but they do have an unbridled enthusiasm and passion for all things businesslike. Like lambs to the slaughter, some will buy anything that might improve their business performance.

The search for the silver bullet, the quick fire, quick win has been fuelled by self-proclaimed gurus and experts offering double-money-back-guaranteed, quick-fix, double-your-profits programmes. In the hope that the new initiative will be “the one”, they absorb the clever clogs five steps, ten stages, 6 Ps or other similarly-named process that looks like it will do the trick; this mystical magic is normally explained and introduced from the stage or in a self-published book. The results never quite appear for the businessperson, so when the next snake-oil salesman comes into town, they buy his wares.

Maybe I am being over-zealous but here’s the point.

Business owners are vulnerable. Often their home is a risk. Failure means bankruptcy and all that entails. They want to believe there is a quick win. They have absorbed a distorted vision of entrepreneurship. They do not see reality. Just like the schoolboy who believes they can beat the million-to-one odds and be the one who plays for England, so the wannabe success believes they are the one that can beat the million-to-one odds and be the one who sells the business for £29 million after three years. This myopia is positively encouraged despite the cold hard truth: it is unlikely they will ever earn more than £50,000 per year.

On the other hand, the larger businesses, those beyond the very small designation who have staff and employees and a bit of a track record are somewhat different. Business owners who have been around the block, let’s call them owner-directors (to differentiate them from the owner-managers) tend to be more savvy. Having seen the magicians come and go they know that there is no such thing as a quick-fix, silver bullet.

The reality is that the owner-director may have been duped themselves into parting with their own hard-earned cash in the past. The last thing they need is another guru with a magic wand. While a dramatic transformation, a radical revolution in how one does business may sound exciting (re-stimulating the passion and excitement of the old days), these wise owner-directors realise that what they probably need is a more delicate and evolutionary approach to growing and developing the business. The quest for explosive sales results is replaced with a desire to achieve sustainable growing profit.

The reality is that the owner-director is very different from the owner-manager. They have too much to lose (the nice car, home and holidays that come with painstakingly nurturing and growing a business) and they are no fools. What they are looking for is far more considered support from people who have a mix of: been-there-done-it expertise, grey-haired wisdom, background credibility and the ability to communicate and assist. At this point in the business, one is looking for support in the long game, recognising the benefit of consistent and constant improvements (3% here and 4% there) that will create an engine for growth.

So, there we have it. The owner-managers (the smaller, younger naïve businesses) find it almost impossible to sort the good from the bad in the sea of offers of help. Their very naivety excludes them from knowing what they don’t know and what it actually is that they need. As a result, they tend to jump from one exciting initiative to the next.

On the other hand, the owner-directors (larger and more mature) are not taken in by the breathless excitement of those selling hope to the needy. However they find it hard to find the right assistance (being too big for the owner-manager offerings and too small for the offerings of the big consultancy houses).

There are gaps in the market that need to be filled. Some people are already filling them. Both owner-managers and owner-directors need reliable, trustworthy support and assistance from people and organisations that have the expertise and experience to deliver. Too often the marketing hype is over-egged to win the sale.