Small Business Survival:
Small Business Survival depends heavily on developing good strategy, principles and tactics. This article/post focuses on principles, for a better understanding of strategy, read my article/post titled (What is Strategy?).
If your small business will survive; you must first understand the importance of strategy and principles. You must also apply the fundamental principles that ensure success in a competitive business environment.
One of the surest ways to find business principles that ensure success in competitive markets & situations is to look at what has worked for others in the past. The following quote goes back centuries to a purveyor of success in my former business (the military).
There are five points in which victory may be predicted:
- He who knows when to fight and when not to fight will win.
- He who understands how to handle both superior and inferior forces will win.
- He whose ranks are united in purpose will win.
- He who is well prepared and lies in wait for an enemy who is not well prepared will win.
- He whose generals are able and not interfered with by the sovereign will win.
I chose this quote because it is contains some of the most successful and transferable principles of competition ever written. They were written by a general for other generals, but they apply and ensure success across the boundaries of profession, craft, art, and relationships.
Sun Tzu’s Points (as Business Principles)
1. Know when to launch efforts and when not to. The success or failure of grand openings, expansions, new product lines, marketing and ad campaigns, workforce expansion, and all other efforts depends heavily on timing. The following tactics are useful here.
- Maintain clear plans and objectives. Keep steady focus and don’t chase squirrels.
- Create an intelligence gathering system. Decision making must be driven by data.
2. Create and apply resource management plans with separate strategies for when competing against superior and inferior competitors.
- Take advantage of the benefits your smaller/lager size gives you in bidding for work.
- Apply your advantages against opponents/competitors who are week in that area.
3. Understand what UNITY really is. Even if your organization is one deep, your efforts must be unified by a common vision, mission and goals. Everyone must have ownership in success.
- Set a zero tolerance policy for things that detract from unity (sanctioned incompetence, gossip, poor communication, lack of shared purpose, and unresolved disagreements).
- Dave Ramsey gave a good podcast on similar versions of these 5 detractors.
- Don’t confuse unity with uniformity. Unity is the oil that lubricates the gears of a diverse workforce.
4. What many people see as luck is simply the outcome of preparation. Anticipate opportunities where circumstances will favor your success. Prepare for them. Push the chance of success in your favor and take advantage of when you are more prepared than others. Inversely, know when you are not prepared for an opportunity (relative to your competition) and have the wisdom to stand that one out.
- Concentrate your resources. Set your focus and specialize in a niche.
- Strengthen your core competencies. Do what you do best.
- Secure your position with barriers of entry for competitors This doesn’t mean being tyrannical. Just secure your position. You may do this by making other positions more attractive then yours, protecting intellectual property, or maintaining and edge over competition.
- Figure out how to put yourself at an advantage and your opponents/competitors at a disadvantage.
- Seek out lightly defended or unoccupied competitive positions.
5. Decentralize Execution. Yes it is your business and your vision. Surely you would do everything if you could, but success means you will see a day when you must delegate.
- When you delegate a project, function, or area…be certain you also empower the person with authority to carry out your delegation.
- Take the time you’d spend micro-managing and put it toward thorough hiring practices.
- Keep your organization structure flat and all your plans simple.
- Keep communication channels short. Each time words pass from ears to mouth, filters, personalities, biases, and agendas are applied and the message changes. Get feedback!
Sun Tzu’s five points easily correlate to the fundamental principles of business success. You could also apply them in any other competitive situation (i.e. sports, teams, gambling, and romance). Remember, they are guidelines that should always be considered. To understand principles and violate them is terribly risky. To fail to know principles and operate without them is simple ignorance. That simple ignorance will cause you to wonder at the “luck” of your competition as you marvel at their success and cry over your failures.
Leave a comment to share your thoughts (and experiences) on (with) competition and survival. Also, share this post with anyone who you think may benefit. You never know when a little push may get a good friend over a barrier that has been holding them back.
Until next time, be well.
– Written by Seth Haigh