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You are here: Home / Customer Experience, Success, Loyalty, Retention / 6 Reasons why SMB Business Processes derail SMB Longevity

6 Reasons why SMB Business Processes derail SMB Longevity

October 23, 2017 by Babette Ten Haken Leave a Comment

Small to midsize (SMB) business processes make or break the ability to grow, expand and sustain a company.

  1. First, the smaller the business, the more susceptible it is to revenue ebb and flow.
  2. Then, with a smaller number of employees, staffers fulfill multiple functions, regardless of adequate training, certification or even education.
  3. Also, within this all-hands-on-deck culture, each day is derailed by the latest crisis. As a result, tactical fire-fighting becomes the norm.
These 3 reasons, as well as the following 3, are why SMB business processes derail SMB longevity.

Right now, I’m working with another SMB owner on business lifecycle planning. She is extremely talented, with a solid reputation and client base built over the past 10 years. However, looking at the future, she is interested in positioning her business for eventual merger and acquisition.

Her business case is similar to many SMBs I’ve worked with. The CEO contacts me to help the business either get to the next level or position themselves for merger and acquisition. As we start to clarify the context of this objective, three additional factors emerge, every time.

  1. The company mistakes several years of solid sales results and increased cash flow as the only trigger events required for expansion. In reality, sales are stalled or vulnerable. In many cases, sales are heading south.
  2. The organization does not have the right people in the right seats to fully execute a business growth, expansion, sustainability and exit strategy.
  3. SMB business processes are: incomplete and ad hoc, inconsistent and faulty, or entirely absent.

Take a look at factor #6, SMB business processes.

Without complete and consistent SMB processes, as well as respectful employee discipline in executing these processes, it becomes difficult to move forward.

Businesses are the result of people, processes, products and services, regardless of business size.

Often, a solopreneur becomes so successful, they need to add additional personnel. However, the CEO has no hiring strategy or processes in place, and zero human resource expertise. As a result, they hire nice people or friends of friends, who have somewhat complementary skill sets. Then, as the business continues to grow, more and more gig or permanent employees are added.

While business growth is a good thing, the business model is not designed to scale in response to growth. As a result, businesses partially retrofit additional and incomplete processes on an as-needed basis, often in response to realizing the process they need does not exist in the first place.

Subsequently, even more employees are added and a variety of personas emerge. However, not everyone plays well together. Also, each employee has a different interpretation of how to execute projects, speak to customers and treat each other. In addition, while some employees are more comfortable working independently, others require constant hand-holding and direction. Consequently, employees become out-of-sync with faulty, incomplete or absent SMB business processes.

And that cosmic SMB event – the crash of people into SMB processes, business model and product – gradually, and then spectacularly, derails productivity, profitability and SMB longevity. Does this scenario sound familiar?

Want to learn more about the Achilles Heels impacting SMB growth, expansion and sustainability? Read Part 1, Part 2 and Part 3 of my series on SMB strategic Achilles Heels.

Then, contact me and let’s get to work on your own business case so you are able to move forward from factors which are holding you, your people and your company back.

Babette Ten Haken is a corporate catalyst and innovative speaker. She serves organizations as a strategist, coach and storyteller. Babette’s One Millimeter Mindset™ Workshops and Speaking programs leverage collaboration to catalyze professional innovation, workforce engagement and customer success for customer retention. Babette’s playbook of technical / non-technical collaboration hacks, Do YOU Mean Business? is available on Amazon.

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Filed Under: Customer Experience, Success, Loyalty, Retention, Professional Development Tagged With: business lifecycle planning, small to midsize businesses, SMB, SMB business processes

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