Small business blunders

Mistakes. Everybody makes them. Maybe you got spooked by the economy and started chasing bad jobs and you moved away from your ideal customer. Now, you are stuck with those jobs until they work their way out of your system. Or, maybe you came down hard on an employee for not living up to his or her potential, when all along you never gave them the tools to succeed.

The point is no one is perfect, and you can always get better at running your small business. Ed Eppley talked about some of the mistakes you could be making right now at a conference in Dayton, Ohio.
 

Not identifying your ideal customer
Eppley said that a book, "The Path of Least Resistance for Managers," notes that the structure of a business was set up a certain way because someone told the owner to do it that way, or because that is the way it evolved.

That can't be the case when it comes to your clientele. You have to be selective when choosing who you want as customers, and Eppley said a lot of companies don't take the time to do so. You have to ask yourself who you want to serve. If you have a team leadership structure, it will take some time to finalize who you want as a client.

"If you have more than one decision maker in your business, I will tell you, you probably need to spend some time hashing that out," he said. "Don't expect it to be done in two or three hours. Talk about it, come back to it a week later, 30 days later, and keep adding to it."

If you have a number of clients who aren't ideal or close to ideal, then a lot of your time is spent solving problems they present. If someone calls your company and is interested in hiring you, you have to decide how much you want to spend on that less-than-ideal-client.

"We are not going to put the same amount of energy into that account or client that doesn't fit our target market," he said.

You don't set clear expectations
If someone gave you a paint brush and told you to paint a picture, you could probably at least get something on the canvas. Fast forward six months of painting – you improve and might even be proud of some of your work -- until the person who gave you directions doesn't like what you did.

Now compare that to when you tell an employee to go do something without clear direction. The task most likely gets done, but not correctly.

"Most of us don't want to take the time to define the results that we want form the activities our people do," Eppley said. "Most appraisals are based around activities rather than results."

When you hire an employee, you have to be clear about the results you want, not just the activities that comprise the position. In sales, it's easy to measure whether someone is doing well because it's in the numbers.

"We want that same kind of clarity for every position so an individual will know whether they are being successful or not without having to talk to you as the boss," he said. "If they have to ask you how they're doing, you don't have performance expectations set clearly or well."

One method is documenting the results an employee isn't achieving, as if you were going to fire them. Except, do this when you are hiring someone so you can clearly explain the expectations of the position.

"Most of us will spend that time when we want to get rid of somebody," he said. "Most of us don't want to spend that time when we are hiring somebody."

Hiring for talent, not fit
It's a common mistake because it's hard to find out someone's real behavior during the interview process. Your line of questioning helps, Eppley said. Ask job candidates about a time they overcame adversity, or had a project that was insurmountable, or about a time when a customer frustrated them so much they wanted to yell at that customer.

"Seeing how they respond to those kind [of] questions will be, not necessarily a guarantee, but it points you in a direction," he said.

If you haven't already, you should also involve some other people from your company in the interview process.

"Multiple perspectives about that same candidate really starts to give you some sense of what other people's opinions would be about that individual," he said.
 

Symptoms vs. causes
If you've spent a lot of time and money on solving a problem only for it to go away temporarily, you are probably only solving a symptom of the problem.

"Most of us tend to solve symptoms rather than problems because we don't want to do the work up front to really gather the data to understand the issue," Eppley said.

Sometimes it takes simple trial and error to find out where the root cause of a problem is, so you have to be patient, Eppley said.

Lack of sales skills
If the person in charge of developing your revenue is coming up short, it might not be entirely their fault. You may need to change your sales process to adapt to the current economic conditions because what worked three years ago doesn't work today.

"You can put a good person in a bad system and they will fail," Eppley said.
 

Tolerating marginal performance
Talking with an employee who isn't living up to expectations isn't easy. Eppley said managers put it off because they don't like confrontation, they don't like guilt or the employee's shortcomings could be the manager's fault. He said using situational leadership can help. Situational leadership said that for every scenario, there is a corresponding behavior that managers should exhibit. An employee can be:

Neither willing, nor able – The employee has done a good job, but when you present them with a new task, they can't and won't do the task. You tell them very directly what you want done and how you want it done, but don't stroke their ego in any way.

Willing, but not able – You have to train this employee, and, unlike the employee who isn't willing or able, you can give them emotional reinforcement because they are showing initiative.

Willing and able – This entails a brief conversation. You tell the employee what you need and get out of the way.

Not willing, but able – You have to find out why the employee doesn't want to complete the task. There is probably a good reason, so you have to ask why they won't work on a task they are capable of completing.

Eppley said it's important to slow down and think about a situation before acting.

"Most of us are in such a hurry to get something done or a change made that we generally don't stop and think about, 'How should I respond, given what I think this person's response to this situation would be,'" Eppley said.

So, next time your business has hit a wall, or worse, is losing money, ask yourself if you are making too many of these mistakes. They could be contributing to your problems, but the good news is they are correctible if you address them immediately.

Brian Horn is associate editor at Lawn & Landscape, a GIE Media publication; bhorn@gie.net.