Business owners around the world have braced themselves for the worst, thanks to an economy that is still suffering. As it turns out though, there are some specific steps you can take to improve your odds of seeing better performance this year.
A study conducted by the Guardian Life Small Business Research Institute polled owners of both thriving and floundering SMEs about their management habits. Here are the study’s six steps to better performance.
1. Prepare for problems. 47% of high-growth business owners said they were prepared to tap cash reserves if revenue suddenly dropped. Only 38,5% of owners at companies where sales were currently declining said they would do the same. The growth companies were also more likely to borrow money — nearly 22% versus just 7% of the struggling businesses.
2. Get savvier advice. The high-growth business owners more frequently sought advice from their accountant, financial advisor and peers through networking groups. By contrast, the low-performing business owners relied more on television and newspapers as a resource.
3. Use borrowed money better. The majority of successful firms used loans for research and development, while the unsuccessful firms used borrowed money to open offices, add capabilities, or make hires.
4. Focus on management knowledge. More high-growth owners made “knowing what I have to do to grow my business” their top management goal, along with improving their long-term strategic planning skills. 75% of successful managers prioritised being a better money manager, compared to 67% of poor-performing owners.
5. Enjoy work-life balance. Top performers said having their own business made them a better person and enabled better-quality family time. Fewer of the struggling owners said the same.
6. Know where you’re going. Nearly 60% of the thriving owners named “having a clear vision for the business” the top factor contributing to their success, while less than 40% of owners of floundering businesses agreed.
What has been the biggest obstacle to your company’s growth this year?