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Change

Has anybody got any spare change? This economy has made it difficult for everyone, except possibly, the guys (and gals) at Goldman Sachs.

But that is not exactly the type of change that I was thinking about.  The change that I want to talk about today is related to change in your business.  As an advisor to small businesses, sometimes I work with folks who have run their companies for 4, 6 or even 8 years.  Over that time they have developed a business concept that has built a client base and some revenue stream.  But there they are. Their goal is to grow their business, but they are having a rough go of it.  None of the concepts or ideas are working.

So, one way to get things moving, they think, is to bring in an advisor.  Ah ha, someone who has been there and seen a lot of other companies.  Somehow they find out about me (Thank you to all of you who refer business my way). So we talk. I ask questions and they are caught up in the moment of thinking about a big payday.  “I know that my concept is worth 4 or 5 times what I am making now.  Look at my customers. All I need is someone to show me the path. I’m willing to do anything.”  And in a few cases, this is probably right.  The company may only be a couple of small tweaks away from greatness.

But way more often, there is disappointment on both sides.  Why is this? I believe that a big portion of this is resistance to change.  The business owner cannot give up what got her to the current point.  Sometimes it is that the owner is doing the work that his employee should be doing (what got him there).  Other times, the entrepreneur is feeling that doing the hard work of selling, implementing new programs or developing relationships with partners is below her.

Change is the starting point for the next level of business.  Most businesses run in a predictable pattern.  Up to about $1 million in revenue, the owner (and entrepreneur) can manage the business by himself.  He can figure out the right hires and engender enough loyalty to build a stable business.  At about $1 million, in order to grow, the entrepreneur needs to change. Things need to get more formalized.  You need sales forecasts, HR forms, partnership negotiations, perhaps even a new business model.  The owner needs to get out from servicing the customer directly on a daily basis and start to lead the business in these new directions.  In the cases where the owner is capable of growing and changing, this is the start of the entrepreneurial-managerial journey.  You are not just running a business, but at this level you are also leading a team that will help to propel the business.

As hard as I try to help an entrepreneur evaluate their readiness for the types of changes that I have described, very few are ready for the reality. It reminds me of the saying “What got you here, won’t take you there.”  You have to be willing and capable of change. You have to look at change as an opportunity to learn new things or to try out talents in different areas.  Will you be successful? Maybe not, but by not trying you certainly will not be able to get to the next level.  Perhaps you will find out that you are capable of performing some of the skills, but woefully inadequate to do others.  Fine.  Now would be the time to grow your strengths and find others to join your team that can do the painful stuff.  Over time, if you look seriously at increasing your talent base, you will become a much stronger businessperson.

But at the heart of the matter, you have to be willing to change – go out on a limb and try something new.

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