Hey there, my fellow small business owners, happy summer to you!
Quick question for you today: what’s the name of your most recent hire? What is their partner’s name (or kid’s name or dog’s name or favorite breakfast drink)? In other words, how well do you know the people who work for you?
My guess is that you know them all pretty well. You may not know everything (and that’s probably just fine), but you would certainly recognize them on the street and know more about them than just their job title.
Now I’m sure you’re wondering, “Why is that a big deal? Of course, I know my employees. I hired them after all!”
Well, that is exactly my point. Small business owners know their employees, their customers, and their vendors. They interact with them. They value them. They know how vital these people are to the success of their business.
Now think about some much larger companies, like Amazon, Apple, or Google (all easy to pick on these days!). Who owns that business? No one person since their stock is traded on the market. And does each CEO of Giant Co. know the names and quirks of all of his (and sometimes her) employees? Don’t be silly, that’s not possible – too many people! The same thing holds for vendors and customers. There is no possible way for the CEO, or really any employee of these large companies, to be able to connect with all the lives their businesses touch.
How many people is it reasonable to expect a CEO of a Fortune 500 company to interact with on a daily basis? And who are these people? How do you think the day of a Bigwig CEO compares to yours?
Big Business vs Small Business
Here are some of my completely fictional, somewhat cynical comparisons of Evil Bigwig CEO (EBC) vs. Small Biz Owner (SBO):
EBC: “Good thing we laid off those 1000 people this quarter. It helped us meet our growth goals for the quarterly earnings report. My stock value is already up over $5M from yesterday! Susan, book my personal masseuse to join me on the corporate jet when I head to my Aspen home. The stress of that decision is weighing on me.”
SBO: “Wow, that was one tough quarter! Thanks, guys, for all taking a pay cut so we could make it through together with no layoffs. I am excited to say that based on our current receivables, we should be able to get you back to your regular salary, and I can start paying myself a salary again. Maybe my ulcer will finally go away.”
EBC: “Let’s change our payment terms for all our 500 vendors from Net 60 to Net 120 so we can stretch out payments to them. Then we can hold onto our cash longer and make more money by investing it an extra 60 days.”
SBO: “Holy sh*t! How can I make payroll if Giant Co. won’t pay for my services for 120 days? What kind of crazy terms are those?”
EBC: “We need to put together a strategic plan for the next five years. Call that top name super expensive consulting firm and have them put something together. Money is no object.”
SBO: “I wish I had time to think about our company goals for next year, but it feels like I’m spending all my time fighting fires. I should really try to set aside a day or two to plan something out.”
EBC: “According to our HR staff, the starting salary of recently graduated software engineers has increased by 5%, so we need to adjust the salary ranges for the six levels of software developer jobs accordingly. Have someone update our job classification program.”
SBO: “Um, the average starting salary for this position is how much? Maybe we don’t need college grads after all.”
EBC: “If we want to retain some of our younger employees and keep them from starting their own businesses, we will need to ramp up our benefits. Let’s add a new vegan line at the cafeteria and start offering pet insurance on top of our fully paid for health insurance program.”
SBO: “I am so proud that we figured out a way to offer basic health insurance for our employees without totally breaking the bank. Sure, they all have an $8000 deductible, but at least I know that the 25% of our revenue that covers our premiums helps them out if someone is severely ill.”
I think you get my point. It can feel like two very different worlds. From what I hear, many of your fellow small business owners worked for a giant company at some point and ultimately decided that all the great benefits and opportunities that come with that job were just not worth it. There’s just something about owning and running your own business. And it’s not just the opportunity to be in control and have some influence over your own path. I think a key component is that you can actually see up close the impact your business has on your employees and customers.
Big vs Small Part 2
At a recent CEO Peer Group meeting I was facilitating, one of the business owners mentioned that we small business owners shouldn’t just mention how many people we employ, but instead focus on how many lives are supported by our businesses. For example, he said he employs 27 people, but that amounts to 53 lives that depend on his company staying in business. And I don’t doubt that he has personally met all 53 of those individuals.
Consider how that compares to the big Fortune 500 companies. While they certainly add value by employing lots of people, the personal connection is not there. It is much easier to lay people off when they are just numbers on a spreadsheet.
Now of course within every large business, there is a subset of people who know each other very well. This might feel like it mimics a small business, but based on my experience, there are several key elements that are missing from this type of relationship. Here are just two:
- Control – Even if you work with a smaller group of people in a large company, you rarely have total control over their career path, including the ability to offer raises and protect jobs in a layoff. In addition, the project assignments are coming from above and you don’t always have a say in how to move them forward.
- Inter-dependence – While a small team in a large corporation might work really well together, and you might feel that you are an indispensable part of the team, the hard truth is that if you leave, you will be replaced with someone who has the exact same job description. The company will move forward in your absence. However, in many small businesses, the value of each and every individual and the vital and unique role they play for the business makes everyone much more dependent on one another.
That is just the start of a long list. Have you worked in a large business and then moved to a small one (whether owning it or playing a key role)? I am certain you can come up with your own list of the differences between big and small!
The Personal Connection
All of this just brings me back to my main point. One of your key assets as a small business owner is your personal connection with all the people in your work circle – your employees, customers, and suppliers. Small businesses rarely require complex surveys and other market research tools to better understand employee or customer satisfaction, because they are right there in the thick of it every day, hearing the issues and resolving the conflicts.
When you make decisions about growing (or shrinking) your business, you know how it will impact all of the people in this work circle. You consider the impact, professionally and personally, as you go. And you do your best to protect your people and involve them in the process. Big business may claim that they do the same thing, but I don’t see a lot of evidence that this is the case (see here and here and here).
While it is definitely an asset and an advantage to be closely connected with your employees, customers and suppliers, there is one group that is often missing in that work circle. Your peers.
When you work for a big company, you often have a plethora of peers. Others that are in the same department as you, those who started the same time you did, people with a similar job description, those located near your office, and so forth. Plenty of people to compare notes, share excitement about promotions or fun projects, or commiserate about the craziness of “corporate” strategy.
But, as one of my CEO Peer Group members put it, when you run your own business, it often feels more like you are on an island. You might have your employees there with you, but you can’t easily turn to them to discuss the challenges of running a business when they are directly affected by your decisions, and if they don’t have the same level of experience and training that you do.
So, we have all these small businesses throughout the country, all on their own little islands, trying to manage as best they can, and often feeling as if they are the only ones dealing with their small business owner challenges. It can be hard to find the time to step away from the day-to-day challenges to work on longer term goals, especially if you are just talking to yourself. And so we all just keep plugging away individually, not thinking about all the other islands around us.
The Solution = A Bridge for Small Businesses
What if we started bridging those islands together? The more we connect with other small business owners, not as a customer or as a vendor, but owner to owner, the more we realize how much we all have in common.
You aren’t alone in your challenges, and you don’t need to be alone in your planning either. Start looking for ways to connect with your fellow business owners. It can be as simple as reaching out to one or two business owners in your area and arranging to meet for coffee once a week. Or you can go a step further and look for a CEO Peer Group that meets monthly away from your work site and focuses more on long range issues and planning. Even if you have business partners, it can be so hard to find uninterrupted time to have a serious conversation when you are constantly being interrupted by emails, phone calls and employees who ‘just have one quick question.
Be intentional about seeking out help. Look for opportunities to connect with similar size business owners. You all have valuable experience from which to draw on; and you can each share and learn from each other.
In my many years of experience working with entrepreneurs at all stages of development, I have seen the value of regular meetings with peers. And there has been plenty of support for this as well (see here and here and here). That is one of the reasons why I sought out training as a CEO Peer Group facilitator, and why I rely so heavily on my own amazing mastermind group of solopreneurs. And of course, why I continually promote peer groups in my writing.
Whether you are just starting up your business or approaching retirement (whatever that might mean to you and your business), having a group of people in a similar situation helps you to feel less alone, and more motivated to schedule time to plan. Now you aren’t a series of tiny, isolated islands, you are a community of islanders!
Ready to make some connections? Contact me to get started!