Is Your Business Struggling? You may be suffering from the "Trifecta of Small-Business Failure." Learn to overcome it
By Hope Katz Gibbs
Founder and President, InkandescentPR.com
Illustrations by MichaelGibbs.com
From “PR Rules: The Playbook,” by Hope Gibbs, coming in January 2014
Why do so many small businesses fail?
Because the very characteristics that make entrepreneurs want to start a business are the ones that cause them to stumble.
That isn’t news. Business experts have been shouting about this fact for decades—including many we have interviewed for Be Inkandescent magazine, such as life coach Martha Beck, “Don’t Sweat the Small Stuff” guru Richard Carlson, “E-Myth” author Michael Gerber, business tycoon Ted Leonsis, and Fast Company magazine founder Alan Webber.
How do the fireworks created by PR work their way into the mix?
From our publicist’s perch at Inkandescent Public Relations, we have been privileged to work inside dozens of companies—from start-ups to multimillion-dollar corporations. We’ve helped them make fireworks, and equally importantly, catch the embers so they continue to shine.
We have also witnessed their challenges. From these, we culled the “Trifecta“—three trends that that can trip up even the most energetic entrepreneur, with even the most carefully crafted business plan. Do any of these monikers describe you?
- The Control Freak. When it comes to your business, have you ever thought this, or said aloud: “I do it all by myself,” “You’re not the boss of me,” or, “Everything is horrible; the sky is falling!” Is so, you aren’t alone. Many entrepreneurs have a tendency to want to hold on tight to all the facets of their business. After all, being in control is why many people start their own companies. But beware: No one is good at everything, much less have the time to think of, perfect, and execute all the necessary tasks required to ensure their business succeeds. So let go—delegate, share, outsource! Collaborate is the key to success.
- The Small-Picture Person. Do you understand the icing-and-cake metaphor? If not, you may not be making the most of your core competencies—your “cake“—by leveraging them to make more money. Start by identifying your core competency, then step back and look at the big picture. Find all the revenue streams available—your “icing“—and incorporate them into your business. For example, if you are are a chef and you are only cooking for your restaurant, then you are leaving money on the table. Consider catering or selling some of your products online. Don’t look just to just break even; super-size your small business!
- The Win-meister. To a “win-meister,” the “win” comes only when you beat someone else. If your competition or colleagues have to lose for you to “win,” you are operating on an outmoded, ineffecient philosophy. The paradigm has shifted! Embrace the 21st-century concept of winning—the win-win-win—in which you win, your customer and colleagues win, and so does the world at large. The Millennials work under this banner; if you’re not, you are missing out on the next generation of sales.
So, what lies at the root of the Trifecta of Small-Business Failure? Perhaps the thing that most gets in the way of small-business success is simply … fear.
That’s why owning a business can be a great playground for personal growth.
How can a good PR and marketing campaign help?
It can’t—not if the entrepreneurs are fearful about asking for help and accepting professional guidance, fearful about losing their business, or impatient about the timeline for success.
Being fearless means having an honest, introspective conversation with yourself about your business and goals to assess what you are doing, why you are doing it, and what keeps you from being truly successful. This conversation is especially important if you are having trouble launching your business, or you aren’t able to generate much income from what you are selling. The problem just might be your approach, or even your products.
You’ll know you are on the right path when:
- Your sales exceed your expectations.
- The feedback you get from customers is glowing, and they want more of what you are selling—in ways that you may not have even thought of.
- Reporters are eager to hear what you have to say.
In this book, our goal is to help you laugh at what holds you back, give you ideas on how to overcome the hurdles in your way, and realize that what you are encountering is probably the typical entrepreneurial turbulence we all face. Ready to face your fears? Here’s to turning the Trifecta on its head.
Shining a Light on the Trifecta of Small-Business Failure
Here are three things can you do to take your business to the next level.
1. Stop the Collaboration Crisis
(The antidote to “The Control Freak”)
Do any of the following three phrases sound familiar?
“I can (and will) do it all by myself.” While these aren’t the exact words entrepreneurs utter when they are talking about launching and / or building their business, it’s the phrase that screams in my head whenever I’m talking with small-business owners (often at start-ups) who are resistant to asking for help—even when they know they need it.
“You’re not the boss of me,” is another common owner attitude—one that occurs when entrepreneurs refuse to listen to the advice of the expert they’ve hired, then holds the consultant or collaborator accountable for the bad decisions the entrepreneur has made.
“The sky is falling,” is the third catchphrase heard when entrepreneurs are truly fearful of losing their business, and so they ask a consultant to come to the rescue in the eleventh hour. By this time, they are ready to ask for help, and willing to take that advice they spurned earlier. But the nervous, impatient client not only expects—but insists—that the desired results be seen right now!
Why is this a mistake? The truth is that no one can be the chief cook and bottle washer in all aspects of their company. While entrepreneurs have likely mastered the core of the business they are building, rarely are they adept at all the aspects of keeping a business engine roaring.
For example: The first person I always hire when I start a company is an accountant. The team at George Kresslein CPA has been working with me since 2005—and I am eternally grateful to them, for they have protected and supported me countless times. Yes, I can balance my books and pay my bills—but why? They do it so much better, and leave me time to do the zillion other things I need to do to keep my business going.
Ask yourself this question: What can, and should, I outsource to free up some time to do more of the work I love doing?
Try this exercise:
- Make two lists: One of the things in your business that you love doing, and one of the things you’d be happier not dealing with.
- Next, grab a red marker and on the “Love It” list, circle the things you are really good at.
- If you didn’t circle everything, move the uncircled items to the “Job It Out” list. Forget about financing list number 2, just build the list.
- Now, check over the “Job It Out” list again and ask yourself if it feels right. When you are happy with the list, get creative about thinking of whom you know—or need to know—who can help you execute these tasks.
- Last, put a budget around the “Job It Out” list. Assess what you can afford, and what the market rate is for those professionals. While you may not be able to hire all of these helpers today, by visualizing your expanding company, you’ll be one step closer to truly building your business.
2. Cut Through the Icing-Cake Metaphor
(The antidote to “The Small-Picture Person”)
Every good business is built on a foundation of multiple revenue streams. Whether you are making wedding cakes for a living, selling hotdogs on a city street, or running a busy medical practice, there are several ways to generate revenue.
But most entrepreneurs don’t think about this. Rather, they pursue the business they originally cooked up (aka, the sponge-cake layer), without much thought to other ways to make money utilizing their skills and gifts (the delicious buttercream icing).
Why is this a mistake? When you focus only on “the cake” of the business, you may be missing other ways to monetize what you have built. Flip the metaphor, and new revenue streams will start to appear in your imagination.
- If you own a restaurant, are you catering parties? Are you selling the products that customers love most on the wholesale market? Are you the go-to business to cater parties—big and small—at local churches and synagogues? Do you buy a booth at the local farmer’s market or area festivals? If so, you may find that all this outreach more than pays your expenses at the restaurant, and the money generated there becomes pure “icing.”
- If you are an artist, what are you doing to let the world know about your art? Creating a social media presence is one avenue, and only costs you the time it takes to post entries on Facebook, LinkedIn, and Twitter. Are you also creating boxes of cards based on your paintings or photos? Are you crafting jewelry, using your creative talents in new and marketable ways? Are you working with local galleries, restaurants, and offices that would want to hang your work—and hopefully sell it? If so, perhaps these additional products will generate enough income to pay all your bills, leaving any money that you generate from the sale of your fine art as the “icing.”
- If you own a medical practice, are you educating your patients — and the community at large—about simple preventive medical tips they need to know? Are you speaking to groups of people, from the Scouts to HOAs, about how they can stay healthy? Have you written a book about the topic on which you are an expert? While these additional outreach efforts may not generate more income than the medical practice, they are affordable ways to increase your visibility in the community. By taking the time to reach out, you’ll not only be showing the community that you are an expert they’ll want to visit when needed—you’ll be providing a needed service. That results in a win-win-win, which is the third prong of the Trifecta (see below).
But first, ask yourself this question: What else can I do with my core skills to generate additional income?
Try this exercise:
- Write down on one sheet of paper all the skills and core competencies that you have.
- Next, create a list of the products and services that you offer on another piece of paper.
- Compare the lists, and consider if there are other products and services you can create that will leverage your skills—and bring you additional revenue.
3. Polish Up Your Win-Win-Win Scenario
(The Antidote to “The Win-Meister”)
“Where’s the win?” That’s a question one of my clients would regularly ask when assessing the value of taking on a new project. Fair enough. But I always wondered how he defined the “win.”
Did he think he won only if someone lost—such as a competitor? Did he consider it a win if he got a vendor to provide services at a dramatically cut rate—one that threatened to put the vendor out of business?
Why is this a mistake? Because this old-school approach to business just doesn’t work as well as the win-win-win approach. Increasingly, visionary entrepreneurs grow their businesses by making sure that everyone wins—themselves, their business partners, and the world at large. It’s like the “Monsters, Inc.” characters discovering after scaring kids for years to generate the energy needed to power their cities that making kids laugh keeps the lights on much longer. It’s not that being the only winner doesn’t count, it’s that doing business so that everyone wins means you build trust, earn good will, and generate even more wins in the long run.
As in the ideas (above) for flipping the cake-and-icing metaphor for the medical practitioner, when entrepreneurs pride themselves on being fair, thoughtful, and giving, ultimately all the parties involved win.
- The Honest Tea Way: In accordance with his mission to make Honest Tea a sustainable green business, founder Seth Goldman created a program that encouraged his employees, and the community, to bike to work. “We believe in being healthy, and biking to work helps with that,” he explains. “It also helps cut down on carbon emissions. So, we bought about 500 bikes, and in addition to giving away most of them in grocery promotions, we gave one to every employee at Honest Tea. Then we asked other companies if they wanted to do the same thing. A bunch of other companies joined us, and it was fun and made sense.”
- How Barefoot Gives Back: When Barefoot Wine founder Michael Houlihan found it tough to convince supermarket chains to carry his brand because he was a start-up, he reached out to nonprofits to build his reputation. “We called it worthy-cause marketing,” he shares, “The nonprofits used the wine for fundraisers and silent auctions, and someone from our staff was always there to help. It worked out great. We got their membership to have a social reason to buy our product, and we liked that Barefoot stood for clean beaches, gay rights, better education, and conservation. Everyone won.”
- Why Reebok Rocks: The same win-win-win principles hold true for Eli Becker, president of Reebok, who recently incorporated the CrossFit brand into the fold. “Successful companies need to have a bigger purpose than just increasing sales,” he told us when we interviewed him for our January 2012 issue. “For a sports company, it’s pretty easy to engage your own employees. After all, most of the people who work here do so because they like sports and think this is an exciting, sexy industry to work in. We hope that other companies see what we are doing, and in the next few years set up a CrossFit Box and the gyms on their corporate campuses. Increasingly, as we can prove that we are a more successful company in terms of our products, and a more creative company because our healthier, active employees are more engaged, we are confident that other companies will do the same.”
Ask yourself this question: Are you in business to create the win, not just for yourself, but for your employees, vendors, and the broader community?
Try this exercise:
- Make a list of the 10 wins you hope to make in 2013.
- Next to each of those items, assess who the winner is: You and your company, the vendors you work with, the community at large.
- With a bright blue marker, circle the items that include a win-win-win.
- If there are fewer than three items circled, you might want to rethink your strategy.
Stay tuned for more. In the upcoming issues of Be Inkandescent magazine, the PR + Marketing column will feature more information from “PR Rules: The Playbook,” which will also be available as an eBook and workbook this year.
Are we giving away the store? Sure. But that’s the point. Our mission is to promote, educate, and inspire our readers so they can improve their processes, increase their visibility, and grow their businesses. And that’s a win-win-win. Here’s to your indelible success!
About Hope Katz Gibbs
Journalist Hope Katz Gibbs has been a newspaper and magazine reporter since graduating from the University of Pennsylvania in 1986. After studying for her master’s degree in educational leadership at The George Washington University, she launched her freelance writing business in 1993.
Gibbs’ articles have appeared in The Washington Post, USA Today, and The Miami Herald; in dozens of association, business, education, and general interest magazines; and in many alumni publications, including her own alma maters, the University of Pennsylvania and The George Washington University.
She won two awards for feature writing from the Florida Magazine Association, and six others honors for newsletter writing from the National School Public Relations Association. She has been listed in “Who’s Who in Media & Communications” since 1989, and “Who’s Who of American Women” since 1993.
In 2008, Gibbs founded Inkandescent Public Relations, a full-service PR, marketing, publishing, and website-design firm that helps entrepreneurs get more visibility. Along with her award-winning team, she creates high-end marketing materials; writes and edits press releases, newsletters, and white papers; and works closely with reporters to help get the word out about her clients. Gibbs also plans and organizes events, co-writes and ghostwrites books, and maintains her clients’ websites so they are up-to-date and provide an accurate, impressive image.
View Gibbs’ journalism portfolio at www.hopegibbs.com.