We hope you enjoy— and are informed by— this first in an ongoing series of articles from ACI’s Director of Diversity Strategies, Bill Cooper (Coop).
What do Small Businesses Need Most?
I first remember hearing this question asked more than 20 years ago at a conference focused on minority businesses. The question was asked by Mel Gravely, now CEO of Triversity Construction in Cincinnati, Ohio. Mel, a thought leader on minority business success, was then the CEO of the Institute for Entrepreneurial Thinking. (Mel actually used minority businesses in asking however I choose to use small in order to address a wider audience).
Since this time, when I have asked audiences, “What do small businesses need most?” like Mel, predictably, I got the same responses – cash and contracts.
I learned from Mel, and the School of Hard Knocks, that while cash and contracts are important—they are not as important as developing and executing a strategy for a small business. Leonard Greenhalgh and James Lowry confirmed this fact in their book, Minority Business Success: Refocusing on the American Dream. They contend that easy access to contracts and capital can “actually be counterproductive if the MBE (minority business enterprise) is not set up to deliver on the contracts or to use the capital wisely.”
Using data collected at the Amos Tuck School of Business at Dartmouth, they compiled a list of the shortcomings most likely to hamper an MBE’s success. Number one on the prioritized list – lack of strategic clarity.
Greenhalgh and Lowry, as well as Gravely, agree that in order to develop this clarity, small businesses must be able to answer questions like:
- What’s happening in the market?
- Where do I fit in the value chain?
- How and where do we compete?
- How do we consistently deliver on our promises?
- How do we make money?
- How do we plan to grow? What customers do we pursue; what customers do we let go?
- Who do I hire? Who do I buy from?
While this list is not exhaustive, answers to these questions and others like them will provide business owners with the road map that they need in order to understand where they (and their business) are going.
Putting in work to answer the questions that help provide strategic clarity offers owners a clearer path to profits, growth, and ultimately wealth. This work is an example of the owner working ON his/her business rather than IN that business. Because it’s often easy for the busy entrepreneur to get so caught up on working IN the business (cutting hair in the barber shop, baking cakes in the pastry shop, or supervising the crew on a jobsite) they may fail to make time to work ON their business (developing a strategy, doing research, or attending training to improve their business acumen).
By the way, for those of us who support and advocate on behalf of small business success, when we simply seek firms to satisfy diverse supplier requirements, might it be said of us that we are only working IN our business? For us to be working ON our business, we need to constantly remind them to stay ON it…