Sunday, 24 November 2013

So, What’s Holding Your Business Back?



So, What’s Holding Your Business Back?
‘It’s not such an easy question to answer…’ said the budding entrepreneur.


‘OK,’ said the business adviser (or coach or consultant or friend or partner), ‘I’ll ask you one more time… So what’s holding you back?’


The reply came, ‘Well, obviously it’s the recession, the market, the competition… then there’s the finance and the getting and keeping the right people’.


‘Ahhhh,’ said the business mentor, ‘so it’s everything else but YOU!’
(Pregnant pause, followed by embarrassed wringing of hands…)


The Magic Million research asked entrepreneurs what they felt were the inhibitors to their business growth. As predicted, their answers were, in order, market conditions, staff (inability to recruit), cash-flow, competition (Directors’ Centre 2008).



Consistent with my experiences, the respondents pointed the finger at everything but themselves! They cited external influences as the key thing that was holding them back.



The recession, the Government, banks, accountants, consultants, competitors, staff and access to funds are clear targets for the entrepreneur’s frustration. You feel that you can identify the culprits and ‘name and shame’ those who hurt you the most. Listen to the dinner party conversation of a frustrated entrepreneur and most sentences start with the word ‘They’! However, I think that what’s actually going on is slightly more subtle and psychological…



Remember Noddy and Big Ears? Sure you do. Whenever Noddy was asked to explain why something dreadful had happened he always replied ‘I didn’t… I didn’t… I didn’t!’



In essence, he was always shifting the blame away from himself and onto others. Maybe he was in denial… maybe he really thought it was someone else’s fault… or maybe he just couldn’t accept the reality. His taxi service was a bit like our poor, frustrated entrepreneurs!



Let me expand …


Ask any entrepreneur what’s holding back their growth and they will usually cite the recession, competitors, staff and access to funds as the problems. These are all external constraints on the growth of the business.  I don’t deny that these are real constraints but I think that they are looking in the wrong place to understand what is really holding them back. So, where should they look? Answer: in the mirror!


In most (but not all) instances, the biggest constraints on a business’s growth are internal, not external. It is the internal constraints that are the real limiters to growth and need to be overcome in order to beat the external constraints.


Put simply, the internal constraints that hold back business growth are based around fear - fear of ‘letting go.’ The two key internal constraints are based on the terror of losing management control (by delegating and sharing out the running of the business) and the terror of the consequences of loss of ownership (when share ownership gets diluted or new investors are brought in). OK, bear with me here if I’ve just symbolically jabbed a pencil in your eye.



As an analogy, talk to any sportsman and they recognise that their internal constraints (psychology, attitude, belief) need to be in tip-top form to deal with the external factors (competitors, environment and so forth). Similarly, businesses need to get their own psyche sorted to take on the outside world.


In a nutshell, the real limiting constraints to business growth are the internal factors (i.e. the entrepreneurs themselves) – these outweigh the external factors (i.e. everything else) for most businesses. The external factors can be worked on but only if the internal issues are sorted out first. How else could so many businesses set up and thrive in a recession?



So, final thoughts for Noddy and his entrepreneurial friends?



Before you start blaming others for your poor performance and lack of growth, take a look at yourself! To grow your business the first thing you need to do is be willing to share the ownership and management of your business. I am willing to bet that you cannot do it all on your own.  Email me if you are that rare soul who can!


So, for most of us the message is to stop blaming everyone else and recognise that the key factor that is limiting your business is you! Maybe you are unconsciously sabotaging the growth of your business! And if you don’t believe me, then have a word with Big Ears!!


PS  Having run businesses through the Thatcher and Bubble recessions I know how one can try to blame the recession or other outside forces when things aren’t going too well. I am not for one moment belittling the massive efforts of business owners. All I am trying to say is that internal factors are even more powerful than external factors.
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