Small business transformation: Four critical steps to success

Yesterday, I wrote an employee newsletter for a client looking back at the year just passed and ahead to 2013. For this company, 2012 was a year of major transformation. In January, they sold off a significant portion of their company because so much consolidation had occurred in this business sector in the past three decades that they could no longer compete as a small, independent company. Fortunately, two specialty areas of their business are in growing market sectors, and they worked hard all year to make the most of the opportunities there.

Last year, when I wrote a similar year-end news roundup for this firm, much was up in the air. Although they knew they could no longer stay on the same course as they had been on since their company’s founding, it had to be awfully scare to sell the portion of the business that had been your company’s bedrock for decades. That’s why I was so happy to yesterday to be writing about all the good results 2012 had brought them and to look ahead to an even brighter 2013.

If you think it might be time to transform your business in 2013, here are things you can learn from my client’s experience:

1. Bring in the right outside expertise. In this case, the company brought in a highly experienced consultant to help them determine the feasibility of a new direction. Together, they decided that opportunities did exist for the company in the specialty areas in which is already had a good foothold. The possibility of geographic expansion was also part of the new plan.

You may think you know all there is to know about your business, and don’t need outside help. But do you have well-honed skills in key areas such as market research, financial projections, and strategy development? If not, then find someone to help you determine the best direction for your business.

2. Actually listen to your outside expert(s). I can’t begin to tell you how many times I’ve seen companies pay good money for outside advice and then totally ignore it. I know this because some of this advice has come from me! Seriously, though, if your small business is in trouble and you don’t know which way to turn, it is likely that you’ll be hearing some advise from outside experts that you really don’t want to hear…but that you desperately need to hear.

You probably want to hear that your business is just suffering a temporary blip. But if the market research your expert provides shows it’s part of a downhill trend that is affecting your entire industry, for heavens sakes don’t think that you can somehow ignore this and just keep on doing what you’ve been doing.

3. Get employees on board. Change, especially transformational change, is never easy. And while you may be hugely enthusiastic about a new direction for your business, unless employees are also on board, odds are you’ll have trouble turning your new vision into a reality. It’s important to communicate openly and completely with employees. They not only need to understand where you plan to take the company but why change is necessary. It may be uncomfortable to talk about problems, such shrinking revenues and market share, but employees need exactly why transformation must take place. In addition, don’t think that sharing your new vision for the business once is enough. You must keep hammering home the changes that need to be made in order for the business to keep its doors open.

4. Act sooner rather than later. Many business owners would not have had the courage to undertake the high degree of transformation that my client did. Still others would have hesitated to take action until it was too late and they were drowning in so much red ink that bankruptcy would be their only option. Instead, this company took the right steps, selling off assets before they needed to have a fire sale. Now they have rebounded and are on the way back up.

In most cases where business owners are considering whether transformation is needed, the handwriting is already on the wall when it comes to their current business model. Although it can be scary to leap into the unknown, staying the course is probably not a viable option. By taking action sooner rather than later, you may be able to put a stake in the ground before competitors get to the new business space you’re seeking to carve out for yourself. Success may not be instantaneous, but at least you’ll be headed in a better direction.

This is my last post for 2012. Happy holidays to all of you and here’s to a great and prosperous 2013 for all small business owners!

2 comments

  1. Mike Russell says:

    Consultants can be a mixed bag. You definitely need to do your homework to make sure they'll actually produce for you. And once they've been with you for a while, ensure you're still getting your money's worth for their services. ROI is everything for any of your contracted services, so don't just go with your gut or because you like the person.

    • Jeanne Yocum says:

      Mike, I totally agree. You definitely have to do your homework when hiring any type of consultant. In the case described in this post, the client and the consultant had a long-standing relationship, so they already knew her value. And as a plus, she already knew their business inside and out, so there was no steep learning curve. But had that not been the case, they would have been wise to do things like speaking with past clients of the consultant, etc.

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