Three common mistakes business owners make when changing course, and what to do about them
OVERLOOKING THE LITTLE THINGS
Changing directions successfully means mastering a slew of details, from the launch date of a new product to the software needed to process transactions. But small business owners, says Jeannette Hobson, a group chair with New York CEO peer group Vistage, "don't want to take the time to review the fine points." The result is that many don't realize they're poorly equipped to execute their new strategy until they're knee-deep in it.
FIX: Make sure you talk about the new strategy with your employees early on. That means discussing the day-to-day realities as well as the big picture. "They'll think of really good ideas because it's going to involve their jobs," says Hobson. And ask vendors what the changes will mean for them. If you're a steady customer, it's in their interest to help you out.
IGNORING YOUR OLD STRATEGY
It could take months before your new strategy starts to pay off, and the effort could end up costing more than expected. That's a recipe for a cash crunch. "You want to look at this as you would any new business," says Ken Gaebler, president of Gaebler Ventures, a Chicago business incubator and investor. "You need the capital required to make it until you're profitable."
FIX: Make sure you have at least a three-month cash cushion. If you plan to phase out your original business, book a few customers for the new one before you make any announcements. Even if sales from the old strategy are down, chances are they're still paying the bills.
Your business problems may stem from factors that don't require a strategic shift. Maybe what you really need is some smart tweaking.
FIX: Make a thorough diagnosis of the business. Examine each and every bit of the company: management, pricing, marketing, positioning, logistics, and staff. Then you can see how widespread the problem is and whether it can be solved relatively simply. If this sounds too daunting, consider hiring a consultant or getting advice from a SCORE volunteer.
Return to the BWSmallBiz August/September 2009 Table of Contents