At 62, I have been at it a long time. It feels like just yesterday I was 12 years old and selling bicycles I had fixed up on my mom and dad’s street corner at 606 N. Clay Ave. in Kirkwood, Mo. That kicked off a long career that involved starting a couple of businesses that made it to the Inc. 500/5000 list and being a founder or owner of several others. For the past 16 years, I’ve taught entrepreneurship and small business at the Sam M. Walton College of Business at the University of Arkansas.
Here are a few things I have learned over the years, stuff I think any business owner would be smart to consider:
Know to whom you are trying to sell and what your competitive advantage is. Your target customer — what they like, where they live, what they do, read and watch. It would be best to have a clear idea in your mind of whose needs you are trying to meet. Everything about your business has to appeal to them. And you need to know what you do better than your competitors. If you can’t quickly and easily answer these questions, you have a problem.
No business is going to outperform its industry or peers with a lower-than-industry marketing budget. I could say this until I am blue in the face — marketing works. If you say you rely on “word-of-mouth,” I assume that means you do nothing marketing-wise. And if that is the case — unless you are a very, very old and well-established business (think Herman’s Ribhouse in Fayetteville) — you probably aren’t doing very well. At least now you can blame it on COVID, and no one will question why you are failing.
You won’t get great employees who care if your practice is to pay the least amount you have to hire someone. I hear many business owners complaining about their people. When you ask them what they do for their people, you hear the same story — they do as little as they have to. They pay low wages, have no incentives, no benefits, and share no business information with their people. Is it any wonder they don’t treat your customers the way you want them to?
You need to remain intimately involved with your business. Business owners who think they can live in Springfield, Mo., and run a business in Springdale and rarely show up there are delusional. Success requires commitment and involvement. Without that, marginal performance and eventual failure are almost assured.
Cash flow forecasting is one of the most important things you do. No, I don’t accept the notion that the No. 1 cause of business failure is inadequate capital. However, I will admit that many businesses struggle or run out of cash and credit because they aren’t looking ahead to see what is happening. Every company has a seasonality. Most companies could do a better job planning capital expenditures. Many businesses have slow-paying customers. And most companies could do more to get credit from their vendors. Nearly all need to do continuous cash flow forecasting.
If you aren’t enthused about and excited by your business, get out of it. Success requires total commitment. It means you have to be thinking about your business most of your waking hours. If you aren’t doing so, you need to ask yourself, “Why?” It’s OK if you aren’t as into what you were at one time. But if so, recognize it as a problem and deal with it. Find a way to get out to do something else.
All this stuff should seem obvious to business owners, but clearly, it isn’t. Time to wake up and smell the coffee, people.
Mark Zweig is the founder of two Fayetteville-based Inc. 500/5000 companies. He is also an executive in-residence teaching entrepreneurship in the Sam M. Walton College of Business at the University of Arkansas. The opinions expressed are those of the author.