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These Top 10 Business Issues are critical for businesses of all sizes, especially closely-held or family businesses.
Top 10 Business Issues
A recent study identified to Top Ten Issues businesses face today. Many of these issues focused on closely-held and/or family businesses, but upon closer examination, these issues are critical to businesses of all sizes. They are:
- 1. Growth Planning
- 2. Organization Design
- 3. Operational Effectiveness and Efficiency
- 4. Leadership / Management
- 5. Compensation
- 6. Communication
- 7. Customer Service
- 8. Risk Management / Succession Planning
- 9. Management and Ownership Transition
- 10. Global Perspective
Many entrepreneurial businesses do a great job of selling and growing a business, but lack the skills for Growth Planning. Strategic and operations planning are critical to the long term survival of any business. This type of planning asks the questions: Who are we? Where are we headed? What is our game plan? How do we accomplish it?
As a small business grows, the lack of Organizational Design becomes evident. Entrepreneurs focus on doing instead of identifying and defining tasks, grouping tasks into jobs, jobs into departments and then linking it all together through a system of communications, performance measurement and control.
As growth occurs, the "do it myself" syndrome of the entrepreneur manifests itself in gross inefficiency. Whether Operational Effectiveness and Efficiency occurs as a result of continuing training in accounting, marketing, customer service and production or as a result of outsourcing the function is immaterial. Advances in technology dictate the evaluation of all areas of the business. Especially in this area, professional assistance can reduce friction in closely-held or family businesses.
Many believe that leadership skills are inherent, but those skills can be trained and fine-tuned to produce results. The fact is solid plans and capable personnel accomplish little without the inspiration of effective Leadership and/or Management.
The area of Compensation can be one of the most volatile areas in any business but that is magnified with the involvement of only a few owners or family. Obviously, better run companies base compensation on results. Clearly defining the performance criteria that is critical to the business and who is responsible for the performance is the first step in performance based compensation, rather than discretionary compensation or bonuses.
When a company is staffed by an owner's relatives and friends, the potential for poor Communications is staggering. Clear communication is vital to a healthy, functioning business. If this is a problem area, outside professional assistance is mandatory.
A small company with the ability to act and react quickly should have the advantage when it comes to Customer Service. Unfortunately, as the business grows, many owners lose sight of the importance of the customer. Customer surveys, mystery shoppers, and other independent techniques are invaluable to maintaining world class customer service.
No one likes to think about potential disaster, but solid Risk Management and Succession Planning can avert the worst case scenario. Without sound plans in place, a business that took years to build can evaporate in months. Some simple plans include cross-training, analysis of factors specific to the business, insurance, estattte planning, and backup and buy / sell agreements.
As the company grows, Management and Ownership Transition planning becomes important. This is another area where it is advantageous to bring in outside assistance. What this consultant can bring is technical support, experience, but most importance impartiality. The fact that the average family-owned business doesn't survive the second generation suggest that owners might consider selling the business instead of "passing it on".
Survival in the 21st century means adopting new technology and adjusting to continual change. The internet has given all local businesses a Global Perspective. At one time a business was only affected by what happened at City Hall. Today, the economic and regulatory matters that occur on the other side of the globe may well affect decisions that must be made locally.
Every business owner should step back and honestly evaluate the situation. Existence tomorrow is determined by how you measure up to these top ten business issues.
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