why do small businesses experience problems?

There are many answers to this question; but the primarily reason to why small businesses experience problems is because of their failure to put in place effective systems and controls such as:

• Policies
• Procedures
• Checks and balances

The purpose of systems and controls is to help manage the organisational activities.
So, why do entrepreneurs neglect systems and controls?

We are still human and sometimes we make mistakes, but the best thing about making those mistakes is that we should see it as an opportunity to improve the way we do things. It should also be seen as lessons to learn from so that we'll try to avoid making the same mistakes over again. Entrepreneurs overlook the fact that an error in one area of the company has an impact throughout the whole organisation. There are four basic types of systems and controls for the business;

• Physical control includes your Inventory Management, Quality Control, Equipment & Tools Management, etc.
• Control of human resources includes Hiring, Retaining, and Dimissing employees. If you learn to hire people - you should also learn to retain and fire people.
• Controlling Information includes Information to be competitive in the market place, Sales forecast, Market analysis, and Production and service scheduling.
• Financial Controls includes Financial control of the cash flow affect every area of the organisation, System for managing , Timing purchases correctly, and Managing accounts receivable effectively.

The photo below is an example of the Interconnections between the four basic types of system and controls in business.

As per the photo above and the one below - you can clearly see the interconnections of each one and how each one of them could contribute to your whole organisation's problems if one or more is overlooked and poorly managed.

So what will a Good Control System establish?

• Standard for performance in the organisation
• Able to compare performance against standards
• You will be able to measure performance within your organisation
• Provide for a way to correct procedures when needed

But what are you going to do about it now that you have this information - how would you help your organisation to achieve your goals? One of the most important component to any organisation's success is it's people (human resources). If you are not getting the results you have been working for - you need to slow down and asses your current situation. As owners and entrepreneurs of small businesses - your business needs to be regularly evaluated and likewise to the people in it to ensure that their interest aligns with your company core values, therefore they are helping you to drive your company mission by effectively contributing to achieving your goals. Without that - you will find that the cost to operate your business will continue to rise and the return on that investment you will find it to go South. So developing an effective and strong management/leadership in your organisation is crucial to your success.

But I hear a lot of owners saying... "we don't need one, we are doing fine - why do we need strong management and leadership skills and team?".

By doing so, you will learn that the skills and abilities that started the company are not necessary the same skills and abilities required to grow the business to the next level.  You may need people who can help the business grow.  These are professionals with experience in the core functions of the business; finance, marketing, and operations. These people must share the company's core values to establish trust and good working ethics and relationship. A business coach/mentor could also help you tackle those issues.

So make sure to reach out and Schedule for your free consultation today if you find yourself in these situations and needing help [click here]

Even the best sportsman and team in the world - they still need a coach in order for them to remain at the top and the best at their game.

An Entrepreneur as a tight robe walker