The 7 Habits of Highly Chilled Small Business owners
This is the third article in a monthly series on small business owners I have met or worked with over the years who developed beautiful successful businesses.
Stories of successful real business owners
In 35 years of doing business and working with some of the most inspiring people I’ve ever met, I’ve learned a very important lesson: Success in small business starts by building great habits. I call these practices the “7 Highly Chilled Habits” and I find they’re best illustrated with the stories of real business owners who I happen to have had the pleasure of coaching.
The articles are based on my E-book, The 7 Habits of Highly Chilled Small Business Owners. All of my books and other resources are available for free here
Highly Chilled Habit #3:
Be On Top of the Numbers
In order to build a Highly Chilled business, you must keep your fingers on the pulse of all your business’ key health indicators, every week
BTW, You can read up on Chilled habit #1 here.
And Chilled habit #2, here
Be Nerdy like Narinder
met!) is Narinder. I could tell a story about Narinder to illustrate almost all of the 7 Habits of Highly Chilled business owners, but this one about numbers is probably the most important.
More than 15 years ago, Narinder started his first small supermarket business in Sydney. This is his website. Over time, the business has grown enormously, and his stores are starting to pop up across the inner city.
Each of Narinder’s stores is profitable, his staff love working there and when he opens a new store, customers bring flowers to welcome him to the neighbourhood. As I said, there are many things Narinder does well, but the habit he’s developed to an art form is that of being on top of the numbers religiously, every day and every week.
Investigate the Numbers
Narinder was awakened to the power of numbers early on. He and I concluded that his first store was not performing to its full potential and we wondered what was wrong, so we decided to investigate. We started by measuring which products and categories sold well and which didn’t. We also analysed which sections of the store realised most of the sales he made. Narinder divided the store into 12 different sections and (with the help of his staff and some simple checklists) set about getting deeper insight into the shopping behaviours of his customers. A month later we had the stats.
It was immediately obvious that 2 sections of the store were visited much less than any of the others. The numbers made it very clear that people simply didn’t walk through those areas. We decided that the store needed to be re-organised and reconfigured. The 2 struggling sections needed lower shelving, more lighting and a different mix of product categories. Narinder pulled out all stops and within a week, the store had a completely different look and feel. After just a month, we were looking at a 9% increase in turnover. 6 months later, sales had grown by 25% with an improved gross margin.
Become a Devotee at the Church of Business Numbers
These days, Narinder measures everything on a daily, weekly and monthly basis. He has developed the habit of having his teeth in the numbers – and he’s never letting go.
Remember, if you want to become a Highly Chilled business owner, you must learn to love the numbers and regularly measure the ones that matter most to your business.
Your Homework (The Chilled Kind)
Here’s a short exercise you could carry out to start the process of making this habit your own.
Ask yourself: What would be the 15 (or so) key indicators of the health of your business?
Next, ask yourself: How could you have each of those indicators expressed as a number on a scale?
Practice Highly Chilled habit #3: Instruct someone else in your business to get you those 15 numbers every week and every month for you a in a single report.
Are you a small business owner in need of a chill pill? Explore Highly Chilled habit #4: Be Thrifty (with your time).
What does it take to be the leader of a Fun business
Great leadership in business can (for a while at least!) compensate for less than perfect scores when it comes to profit, passion, planning and many other pivotal aspects of running a Fun Business that sustains you for years to come.
If you are a great business leader of your people, then you’ve taken the Leadership Truth from my first book (download it for free here) to heart: “Your time, your health and your brain cells are gold,”. It’s also likely that you live the Truth from my second book (download it for free here) about leadership: “You have passionate beliefs, you walk the talk, and you are not afraid to dream,”. If so, you will more than likely have a business that does better than most.
I also once wrote that “a leader is simply someone we trust, and who is courageous, authentic and passionate.” This is clearly a great starting point because if your people don’t trust you, then no amount of systemisation, marketing or planning will get your business past a subsistence level. Inversely, when your people do trust you, see your courage and feel your passion, you will be forgiven for many other shortcomings.
Now, I’m going to invite you to take this thinking one step further.
Fun for Everyone
A Fun Business should be Fun for everyone involved. It should also sustain everyone – not just the owner – for years to come.
When I say everyone, I actually do mean Everyone (with a capital “E”): you, your family, your staff, your staff’s family, your suppliers, your contractors, your customers, your investors and even your community.
In fact, I am completely convinced (from everything I’ve seen and studied over the past 35 years!) that truly great small businesses are founded by and built around a leader who is committed to building such a business, for everyone.
Servant First, Leader Second
In his book “Good to Great”, Jim Collins talks about the concept of “Level 5 Leadership”. Leaders who operate at this level are passionate, authentic, driven and ambitious – but not for themselves.
Level 5 leaders are ambitious for their organisation and their people. Their ego doesn’t get in the way of how they run their businesses. They might be heading up massive global corporations, but they still fly economy (like the founder of Ikea) or do their own shopping at the supermarket on Saturdays (like the founder of Walmart) or answer their own phones (like the CEO of Nucor Steel).
This concept has a lot of parallels with “servant leadership”. Robert Greenleaf at Harvard University coined the term in the 1970s, but the idea has been around for much longer (a famous Chinese general wrote about something similar thousands of years ago). As Robert Greenleaf explains: “The servant leader is servant first… It begins with the natural feeling that one wants to serve first. Then conscious choice brings one to aspire to lead… (versus one who is leader first…).”
In my experience, every small, medium and large Fun Business that sustains all for years to come is run by a leader who sees their role as servant first and leader second.
A great example of this “leader as servant” notion comes from a client of mine who owns supermarkets. I remember the day we were discussing the structure of his business and we had drawn a new organisational chart in the traditional hierarchical model – the classic pyramid structure.
My client sat on top of the pyramid as the CEO. He had two different top managers below him, a bunch of store managers in the middle and all the shop staff at the bottom. We spent a lot of time talking about the structure and it became clear that my client was feeling uncomfortable.
We got up and walked around the room a little and suddenly his eyes lit up while he was stood on the opposite side of the table. “That’s it,” he said, “I am going to turn the pyramid upside down! I see my role as being at the bottom, not the top. My role is to support everyone in the business to do great work and grow as people.”
My client had that insight in 2010 and now his company has grown into a Fun Business that sustains everyone and will undoubtedly do so for years to come.
There is a quote by sales guru Zig Ziglar that illustrates the same principle: “You can get everything in life you want, if you will just help enough other people get what they want.”
Your Homework (The Fun Kind)
Think about some of the greatest business leaders of the modern era. Don’t imagine the rock star leaders who are household names for a while and then cash out and let everything fall apart behind them. Focus on the quiet, enlightened leaders of businesses that grow and develop year after year without fanfare.
In order to build a Fun Business that sustains you for years to come, you need to strive to become an enlightened leader. These leaders are committed, driven and ambitious. However, they don’t do it for themselves. They do it for the business and its people.
What can you do to embody enlightened leadership? It could be anything from regularly sharing helpful insights and nuggets of wisdom with your team to honing your emotional intelligence in order to find more empathy for others. No guru necessary – I promise!
Remember, if you want to have something you’ve never had before, you’ve got to be someone you’ve never been before.
Next Month, I’ll be talking about the myths of business growth, click here
And the hard hitting truths about business management
Would you like to move out of overwhelm and start building a Fun Business that sustains you for years to come? The truth is that once you’ve laid the foundations (using the Hedgehog Principles), it’s all about learning to manage your Fun Business properly.
I won’t lie, you will need to focus on a few fundamentally dull things, small business management in other words, like goal setting, team management, planning, systems and measuring. However, I have a few shortcuts and strategies up my sleeve that make the process markedly more exciting…
A Fun Business Has Flexible Goals
Everyone knows that goal setting is a good idea. It engages your team. It improves your decision-making. It helps your business deliver on its promise. What’s more, I don’t believe your business will ever become Fun if you don’t practice goal setting effectively. To manage your business well, to build a great Fun Business, you simply can’t avoid Goal setting.
Still, goal setting is surprisingly difficult to do well. It’s hard to get people onboard. It’s even tougher to keep everyone accountable. Our world is also changing every day, so goals must be continuously adjusted to suit new realities.
SMART is a well-established tool for creating impactful goals:
I like the idea, but I believe that adding three more letters to the acronym makes it exponentially more powerful:
S tretch (you can just see yourself reaching for it)
I nspiring (for you)
P ersonal (about your personal achievements and growth. Read: not about achieving a particular profit level or buying a Porsche because unfortunately, those material things won’t motivate your subconscious brain!).
I always invite my clients to decide on a large, visionary goal for the future (Jim Collins refers to this as the BHAG or “Big Hairy Audacious Goal” in his book, Built to Last) that meets the SMARTSIP criteria and then break it down into a medium-term goal and a goal for the year.
A Fun Business Engages Everyone
Lots of businesses proclaim that their people are their greatest asset (and to be honest, whenever I read that statement on someone’s website, I run a mile), but most of them generally belie their beliefs with their actions.
Most companies prefer not to think about the fact that a business IS its people, and your business only gets to make money if your people let you. Business Management is about people first and foremost.
If your employees are only interested in their paycheck, you will always struggle to make a dollar and business will feel anything but FUN. On the flip side, if your whole team is enthusiastically pulling in the same direction then your business will move mountains.
So, how can you achieve said nirvana?
Hire the brightest: Find people whose attitude, energy, enthusiasm and resourcefulness matches your culture and team dynamics.
Move beyond money: Listen to people, recognise their achievements and give them the right tools to do a meaningful job well.
Get the team involved: Bring your people into all the processes, planning meetings and rhythms of the business.
Remember that employees are people too: Don’t just dictate – get people involved in developing their own goals.
Play the game of business: Get your people to start thinking like team members who are playing a game that they all enjoy and want to win.
A Fun Business Has a “Living” Business Plan That Drives It Forward
Human beings don’t accomplish anything without a plan. In fact, some say it is our ability to plan that sets us apart from other animals. However, most small businesses do not have a formal business plan, and if they do, it generally lives in a dusty bottom drawer.
Having a written plan (AKA one that exists outside of your head) allows other people to engage with it and understand where the business is going. It allows you and others to check progress, brainstorm, make good decisions and maintain focus on the important stuff.
Most business owners know this. I’m sure you do too.
The sticking point comes from a simple misunderstanding. It comes from believing you are expected to develop an externally focused plan in the format we are taught by accountants, consultants and government bodies (read: not designed to be useful for you, the owner) when an internal business plan is what you need.
An internal business plan is a shareable and succinct “living” document. It is created collaboratively and revised frequently. It is designed to support decision-making and internal communication about the direction of the business.
Trust me, once you let go of your idea of what a business plan “should’” look like and just get around a table with a flip chart and a group of your people, you’ll find that business planning is not actually daunting at all, but instead really powerful and Fun.
A Fun Business Has Rhythm and Regularity
Entrepreneurs are the busiest and most guilt-ridden people on the planet. They work long days, dream about their businesses at night and repeatedly scorn themselves for not living up to some impossible standards laid out by a critical inner voice [HYPERLINK TO BLOG POST 1].
As a result, most business owners operate as crisis managers. This situation has many undesirable consequences: dropped balls, neglected business development, burnout, missed family time, stomach ulcers, or all of the above. An atmosphere of stress and last-minute problem-solving also starts to develop company-wide, leading to low morale and high employee turnover. You get stuck in a loop where you don’t have time to foster predictability, develop systems or train people to handle the crises themselves and because of this, there will always be another crisis.
The way through this dilemma? Building rhythm and regularity into your business.
One of the best first steps you can take is to start a weekly operations meeting where everyone reviews the previous week and plans for the next one (a better one). Want to make it effective? Start and finish on time. Follow an agreed agenda. Ensure everyone is present. Don’t allow distractions. Focus on solutions.
Next, you might decide to look at the systems in the business because systemisation is an important contributor to a sense of calm predictability. This could be as simple as creating a script and a standard form/checklist for inbound office calls.
Remember, people want to feel safe, and safety starts with knowing what the future holds.
A Fun Business Measures the Fun
Beyond the most obvious measurements, every business has different priorities. However, there is one key measurement that all business owners should consider starting with: Fun.
Fun is the only success factor that cuts across and influences every aspect of business.
One of the reasons Fun doesn’t usually get measured is that most people believe you can’t because it is intangible. But you can measure intangibles such as Fun. Quite easily and accurately as a matter of fact.
Let’s say you asked your team every Friday afternoon to give an anonymous rating on your Fun in Business scale from 0 to 10, with 10 being the most fun you’ve ever had in business and 0 being the opposite. Next you collate and average those numbers and come up with a single “Fun number” for the week in business.
You could then have a staff meeting every Monday morning and share last week’s Fun number, asking the team what you could all do to get the number just a couple of points higher in the coming week.
The first few times you do this, your team will make silly suggestions about doubling their wages and paintball outings because it is all such a novel idea. However, I guarantee that soon enough it will become obvious to everyone exactly what real business Fun is all about and you will start having practical, productive conversations that make exciting things happen.
Your Homework (The Fun Kind)
Here’s a couple of steps you might take in the coming week(s) in respect of each of the management truths:
For Goal setting:
Thinking about the SMARTSIP structure I describe above, pick a date, ideally no more than a year from now and no less than 6 months away ad create a Goal (or set of Goals) for you and your business that inspires you and is both a stretch, yet achievable,specific and measurable and meaningful to you personally and motivating for your staff
Create a rough draft monthly plan for achievement of your Goal with monthly milestones
For your team:
Get your team involved. Organise a meeting with your team and introduce the Goal and draft plan to them and work with them to firm up the plan
Assign specific tasks from the plan to team members or groups of team members
Agree on monthly meetings with your team to update the plan, and agree on next months actions and responsibilities
For your business plan:
Incorporate your Goal in a longer term plan. Where do you want your business to be in 5 years, what is it going to look like, what is its focus, how big is it, what new developments have taken place.
On your own or with your team (or part of your team) create a SWOT and create actionable targets to address the top 3 items from each of the sections (see more about SWOT here and also here )
Start by blocking out a small amount of time each week for yourself (as little as an hour each week or as much as you can manage), to do nothing but think and plan and develop new ideas. Phone off, can’t be disturbed, go off site to a cafe if you need to make sure you’re not disturbed.
Implement a weekly half hour meeting with your staff to set up the week… Celebrate the wins from last week and plan to have more wins this week. Make sure it’s quick, efficient and doesn’t talk about why certain things went wrong last week, simply acknowledge the things that went wrong and focus on making sure things go right this week instead.
For measuring the Fun:
In your weekly and monthly meetings, start by asking everyone for one small tiny little thing they can do themselves to mak the week ahead more Fun
In your weekly and monthly meetings ask the staff for one thing you can do to make business more fun for everyone in the week ahead