Business Management: Research shows Owner-Operators must undo the business shackles!
New data has confirmed what we have all suspected for some time. Business Owner-Operators are shackled to their business, are working more hours than most workers and neglecting their own happiness.
Eyes Wide Open provided an online management skills test designed to help owner-operators determine how their business practices compare to others. Periodically we analyse the data collected. The current results are based on a sample of more than 300 owner-operators in 32 industries. The emerging insights are particularly powerful because they’re based on self-assessment rather than an outsider’s view.
Some of the key insights from this analysis are shown below. EWO can help you redress the imbalance and reduce business owner reliance through the implementation of strategic management systems.
Small business offers a better lifestyle?
The data indicates 64% of SME owners work more than a 40-hour week and only 45% take four weeks holiday each year. In the retail sector this drops to 14%. Only 38% of all respondents have any form of personal development plan to ensure ongoing career development and satisfaction.
While many business owners consider they’re in business for lifestyle reasons, this is clearly not their reality. Furthermore, based on consulting work completed by EWO, we know there is a strong correlation between owner fulfilment and satisfaction and the long-term sustainability of the business. We believe it is essential that owner-operators start taking better care of themselves. Book your holidays well in advance and carefully consider how you can re-organise your business to reduce reliance on you.
Is your business performance falling short of expectation?
The data also points to a shortfall in our ability to manage the performance of our businesses.
For example, only 61% of businesses completing the management skills test set and hit their sales and profit targets in the last 12 months. Within the manufacturing and construction sector this dropped to 28%. On the flip side, accountants (80%) and human resource firms (79%) performed strongly when setting and achieving targets.
Clearly it should prove to be time well spent if you pick the brains of your accountant about how to successfully set targets.
On-the-ground experience has shown us that most companies set themselves up to fail when it comes to performance management. Effectively setting targets is a challenging process. Theory books make it sound easy but in most instances it isn’t. The difficulty means many people choose to avoid the task. Alternatively the targets that do get set prove to be impractical or unachievable.
It may be useful to understand there are two broad approaches to target setting. One school of thought is “shoot for the stars”, the other is to set more conservative targets based on a robust rationale for achievement. We have found the latter more successful when driving growth. It gives the business owner focus and confidence and each success builds more confidence.
Owner-Operators Avoiding Business and Marketing Plans
Seventy-seven percent of owner-operators have set goals for the next 12 months. It appears owner-operators are future oriented. However that focus does appear to be relatively short term. Only 50% of respondents have a written business plan and 37% have an exit plan to deal with the long-term outcomes of their business.
But don’t start feeling neglectful just yet. You may be interested to know that only 41% of marketing, business consultants & coaches indicated they had an exit plan and only 59% have a business plan. Perhaps it’s the nature of being a small business owner-operator and the pressure of short-term demands, which keep us from carefully considering the future.
However with those excuses aside, it will prove invaluable if you take stock of why you are in business and what's important to you. Ensure you not only dream the dream but also carefully consider the steps to achieving it. It’s important to be clear about these factors to ensure you’re able to sustain your motivation and commitment to building a successful business.
You might also like to read:
Creating Business Change: Financial Planning company shifts to new performance level
Len, owner of a Financial Services company, talks about the challenges of creating change in his business. Better systems have resulted in more robust, reliable and valuable service for their clie..Read More