The main reason the majority of small businesses remain small is their owners are very unproductive.
What is the relationship between productivity and business growth?
Let me answer this question with a story…
On Wednesday night I attended a business networking event in White Chapel, London. It was one of those networking events where everyone just walked around and chat with anyone.
There was no formality of sort, you just walk around the room and chatted with anyone willing to chat with you.
A guy came and stood next to me. We started chatting, I asked what he did, he responded that he taught people how to use Excel.
I thought I did not hear him well so I said pardon me?
“What did you say you did for your living?”
“I teach people Excel” he repeated
Then he went on to explain to me how many people do not understand the importance of Excel to their job prospect, therefore do not want to learn it.
Being a marketing consultant, my inclination is always to ask people for their USP or their reason for existence as a business.
When I asked him these questions and he did not have an answer to them I suggested maybe he needed to teach something more modern than trying to make a living teaching Excel in the smartphone age.
He informed me that he had been a member of the group for three years. I asked if his business was profiting as a result of been a member.
He responded that he does make enough to be in the position to pay the annual membership fees of £250.
I stood there thinking to myself, the guy attends over fifty events a year, waste about four hours of his time at these events, probable an hour of travelling each way and all he has to show for it is £250.
I rushed to the locker room, took my bag and sped out of there.
There are two very important lessons that are worth extracting from the above story as an entrepreneur or small business owner.
The first lesson is the fact that he could not even articulate his reason for existence. Businesses that succeed and move on to become a leader in their market are businesses that are filling a gap in the market.
As a business, you need to have a reason for exist. Because someone is a lawyer is not enough of a reason to open a law firm. There has to be a gap in the legal market they are trying to fill.
My guy is teaching something that is obsolete. How many people really have the need for Excel?
To establish a business based upon something simply because it is the only thing you know how to do is not a good business strategy. That is a recipe for remaining small or quickly going out of business.
The second lesson I hope you will take from this story is the lesson of productivity.
I said the moment I completed my discussions with my guy I sped out of there.
Why did I speed out of there?
I simply realised that, that was not the place for me to be. Meaning no disrespect to those who were there, I just did not want to be in that crowd because I knew I was not going to achieve anything concrete from being there.
This is a calculation that the majority of small business owners fail to make, which is why they remain small.
Extreme productivity demands that first and foremost you set a goal for each and every action you take.
When I attend a business networking event, I attend it with a specific objective in mind. I do so to meet a specific type of people. When I notice that the people in the audience do not fit my criteria of people capable of contributing to my success, I leave.
When you engage in any activity that does not lead you towards your objective, you are being unproductivity. I have used networking as an example but there are many ways small business owners waste their time during the course of the day.
Extreme productivity also demands working from a productive working environment. Many small business owners work in environments that are not conducive for productivity.
If you walk from home and you realise that as a result of circumstances beyond your control it is impossible to create a conducive working environment at home and you cannot afford to rent an office, go to someplace else to work.
Go to the library for example, go to the park, just go to an environment you can be productive.
Another perquisite for productivity is setting deadlines. How many times have you set a goal that you never achieve? One of the main reasons for that is you do not set a start and an end time.
A friend of mind has been writing his book for the last five years he has still not been able to complete the first chapter. I am sure you know of people who have been contemplating doing something for many years but they have not been able to do it.
The key reason for failure to do anything is the lack of deadline and the lack of consequences for bridging your deadline.
Mechanism for measurement is another key to extreme productivity. What gets measure gets improved. You need to be constantly taking stock of movement to change course or make adjustments.
In the casino business, they count the till every hour. In Disneyland staff performance are being measured on an hour by hour basis. If a staff is selling pin at a specific location and by the first half of the day, they have not sold the same amount of pin or more pins than the person who was stood in the same position the previous day, they are quickly moved to something else.
For Disney and the casinos, it is about the numbers. The numbers tell them the progress that is being made each hour.
As a small business owner, you might not have a boss to monitor your numbers. This can sometime lead to rot. To prevent that, you need to create your own set of numbers through which you can measure your performance.
Many small businesses remain small because their founders lack the ability to clearly articulate their reasons for existence and they are very unproductive.
If you like to grow your business, you need to be able to clear articulate your reasons for existence and you need to be extremely productive.
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