4 traits of top small businesses

3114255_thumbnailI’ve been dealing with small businesses for about 10 years — most recently as a founder of this site and before that managing sales in newsagents for a publishing company. I reckon that one-third of businesses in any industry are doing well, one-third are treading water, and the bottom-third are taking on water.

Here are my thoughts on what traits separate the best operators from those who are just drifting along, or those who are sinking.

1. Top businesses constantly challenge the status quo.

The best businesses are never completely happy with their business. They constantly challenge the status quo. They have the vision to see beyond the limits of their current operations.

The best businesses are thinking about the next improvement. That might be getting another van on the road, or hiring a new staff member to take care of admin. Or it might be getting matching uniforms made up for the team, or buying a new tool or piece of equipment to work more efficiently.

And when they’ve ticked that improvement off their list, the best operators start work on another improvement.

2. The best have a “can do” approach.

It’s easy in business to have a whinge about something: “Petrol prices are going up”, “these young blokes don’t work as hard for me as I did when I was training”, “I can’t work out how to use this bloody website”, “customers are taking an age to pay their bills”, or “a new competitor set up shop down the road”.

But in my experience the best don’t complain (much). They understand that running a business is tough. They know that supplier prices will go up, that competition is fierce, and that new technology will change the way we work.

While the bottom-feeders complain, the best operators seem to get on with the job.

3. The best track their performance.

Leading businesses keep track of sales and have robust bookkeeping practices. They regularly look at their financial performance as well as non-financial indicators.

A common mistake I’ve seen is trying to save money doing your own bookkeeping (we’ve made this mistake). If you’re a great carpenter or graphic designer, you may not be very good at bookkeeping. The best businesses have someone to look after the books and admin, and tun through their performance with them more than once a year.

Top tier businesses also track non-financial indicators like customer conversion rate. They know how many enquiries they get in a month, where those leads come from, how many proposals, quotes or pitches they make, and how many deals actually close.

4. Leading operators get involved with industry groups

The most professional operators are often members of industry associations. Industry bodies are a great place to see what others in your industry are doing to grow. They can also help give you access to exclusive events, training, and access to key suppliers.

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