We’ve found throughout our work with small businesses that there are three critical mistakes that you can make which can really harm your business. Today, we want to share the story of “Larry,” a small business owner that faced these three problems. Luckily, we were able to fix them, but we are sharing this post so others might be able to avoid them.
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Larry runs a small home services business. He came to use because he was struggling. His customers were disgruntled. He had stopped growing, and the perceived value of his services was dropping. As a result, the profits were dwindling. Larry was overwhelmed and needed help. He was constantly putting out fires, which could have been avoided. When we met Larry, we identified our three critical mistakes, killing his small business potential. This is where we stepped in, because we know how bad a mistake can be.
Larry and the Three Critical Small Business Mistakes
Like all small business owners, Larry was wearing multiple hats. He was so busy doing his work that he had little time to stop and think about if they were the right things to be doing. It’s very important to face these issues head on, which can sometimes be a harsh truth to realize.
Critical Small Business Mistake #1 – Being a Jack-of-All-Trades
At one point or another, we’ve all had to wear multiple hats, from being a CEO to being a janitor in a single day. However, just because we can do everything doesn’t mean we should. If we do, we run into the problem of our business running us. If a business owner doesn’t have control over their business, then they don’t have time to think about where the business is going.
Larry was a workaholic. We all are. Larry’s situation worsened as profit became tighter. He found that he kept taking on more and more tasks to save money. What he didn’t realize that his inefficiency in those tasks were costing him in the backend. By the time he finished everything, he had little time and energy to take a step back and ask himself why he was doing everything.
The first thing Larry had to do was learn to say ‘no’ and stick with it. In short, he had to delegate. We’ve touched on delegation and how to do it, so we won’t go into detail here. Suffice it to say, Larry was a task hoarder. The first step was to free up enough time where he could focus on the key issues driving his business.
Critical Small Business Mistake #2 – Missing Prospects
Larry was so busy that he wasn’t actively following up on leads. He would accept a “no” and move on, or worse, forget to call them back. The truth is a “no” today doesn’t necessarily mean a “no” forever. It often means “not right now”. Larry needed a better CRM system that pinged him to follow-up with responded ‘no’s.
It’s best practice to follow up with your leads, even if they had said ‘no’ in the past. This doesn’t mean become a spammer, but a nice, respectful ask is usually accepted. If you take control of your lead and prospect process, you may actually land a few new clients or more work from existing ones with some cajoling. A respectful outreach – key word, respectful – keeps you in mind so, even if they aren’t ready now, you name is still known.
The worst was not calling prospects back or leaving comments unaddressed. It makes you look bad. Not only are you leaving money on the table, you are discouraging others from actively seeking you out if they seem previous post unaddressed. It makes you look sloppy, and it can often lead to businesses failing.
Critical Small Business Mistake #3 – Not Listening
Larry was a bit tone deaf when it came to subtle cues. Customers will always give you a clue as to how they think about you, subtle or otherwise. This is invaluable. It’s a gift that you can use to make your business better. Any feedback, positive or negative, is better than none. Feedback is actionable. Silence is not. Remember, not responding to feedback is worse. It’s best practice to answer all feedback. It lets customers know that they are being heard. By simply acknowledging a problem and trying to fix it can change a negative review into a positive. Completely ignoring the negative reviews will likely lead to more negative reviews.
Getting Larry Back on Track
First, we went through our delegation exercises, and we uncovered the roles that Larry needed to delegate to free up his time. Second, we helped Larry find a CRM that could work for him. We got him started, and he assigned a role to one of his employees to manage it. Larry would still address the comments, questions, and inquiries, but not the day-to-day management of the system. Finally, we helped him find a social media manager. This role would monitor feedback and respond based on a script we developed. We also built an escalation process so the comments that needed Larry’s attention got it.
It took some upfront investment in people and systems. We were able to help Larry secure the needed money (working capital) to hire the people he needed and purchase the systems necessary to improve efficiency. It took about 3 months for the effects to really show. After which, Larry started to see his business grow again. After six months, things were running smoothly, and he was able to pay off his line of credit within 24 months.