I openly and wholeheartedly confess. An exclusive to The Yorkshire Post – I am a plate spinner. There you have it!
For those readers that know me or know of me, you probably see me as a solicitor, entrepreneur, public speaker, and/or a writer. From your perception, I am at least spinning four plates. In actual fact, I spin a lot more because I am a business owner of a small medium size (SME)! I used to try to spin different plates by myself within the business, but I realised that I didn’t need to.
SME businesses all have very similar problems in terms of challenges they face and their owners all attempt to spin as many plates as possible. There is always a risk that by spinning too many plates, you’ll drop one. However, another problem with spinning plates is it can become a routine, you do it often enough and long enough, you forget that you need to hand it over to someone else.
The journey for any business is not always easy. In my humble opinion, I believe that a lot of SME businesses toddle along and develop a very good lifestyle business by finding ways to cope with the challenges but not fully addressing them. However, when a business develops and grows, you will always need someone else there even if it is to help you question or develop. You don’t know what you don’t know and therefore how can you reach your full potential?
The obstacles faced by the SME can feel insurmountable at times and if you have had the guts, drive and dedication to set up a business, especially with no other partner or co-director, it can often feel like the weight of the world is upon your shoulders. More often than not, we tend to worry about things that we have no or very little control over, such as facing increased costs from suppliers, or changes in legislation that lead to concerns with cash flow. Sales can also be a worry and sometimes not within our control, for example if there is a downturn in the economy or if businesses are just being cautious say, for instance, because of uncertainty over Brexit.
There are a number of challenges that an SME business faces. In particular, look for help in these areas:
1. Budget for a chief financial officer (CFO) and a solicitor
From early doors, I knew one of the things I was not an expert in was finance and it was not something I enjoyed. I am more words than numbers. Inevitability, I knew early on that I would avoid carrying out the financial tasks as it should be done. I could spin the plate but actually needed it to be controlled and dealt with in an efficient and effective manner.
So I employed, for all intents and purposes, a CFO in addition to the everyday accounts. The CFO helps me with management accounts, profit margins, costs and their reduction. As an SME you don’t need a full-time CFO, only someone who acts as a consultant. Ensure you have a positive and interactive relationship with them.
Always ask questions and don’t be afraid to say “I don’t understand, please explain.” Don’t just care about the turnover or bottom line. Understand the numbers. Their assistance will help you understand seasonal changes, anticipate costs and find reductions in cost. More importantly, they will assist in helping you understand growth in financial terms, the costs, turnover and profit margins.
Equally important and within the same category is budgeting for a solicitor. Most companies don’t! They think they can just use the terms and conditions that they have ‘acquired’ or use old contracts. The problem with this is that as a business you are playing Russian Roulette. You are betting that the documents will be watertight and do what you want, and actually apply to your busi-ness. This may not be the case. Instructing a solicitor early could save you money in the long run if, for example, a dispute arises over the documents you are relying on.
Often a very difficult area: How do you find the right person? Which recruitment company to use if you can afford it? How do you cover the costs? More importantly, when working in a small business how do you ensure that they fit into the team?
In some instances, it can be difficult to recruit simply because there is a shortage of labour in that sector. A Federation of Small Businesses survey in June 2015 found that “almost 30 per cent of small firms were being held back by a skills shortage, with construction and IT a particular problem”.
Another consideration for businesses is not just employing the right person but also looking at how they stay and develop within the team. A business leader of an SME in the food industry in Yorkshire openly acknowledges that they develop and train the best within their industry, yet every year lose a proportion of staff to larger corporates because they just cannot compete with them not only in terms of wages but benefits.
As a leader of a company you have a core role and responsibilities. It is important to delegate and, when doing so, empower and train management. Don’t allow people to become accidental managers. Mentor them, give them tools.
In addition to delegation, as part of leadership you should also develop managerial effectiveness such as time management, strategic thinking and decision making, and you should also look to inspire your employees. Don’t forget that it’s also important to guide change within you, and ensure you have training, as well as someone to guide and assist you though your own leadership.
Hopefully with help in these key areas, you will feel less like you are constantly spinning plates.