Summary

The article discusses common reasons why small businesses, like a freelance venture or a bakery, fail, emphasizing the importance of focusing on executive functions and strategic growth rather than getting bogged down in day-to-day operational tasks.

Abstract

The content delves into the pitfalls of small business management, using the author's personal experience and the hypothetical example of "Joe the Baker" to illustrate key points. It highlights the necessity for business owners to transition from working in the business to working on the business, prioritizing tasks that drive growth and strategic development. The author underscores the difference between deep work, such as product research and growth strategy, and shallow work, like designing product images and handling customer complaints. The article suggests that a shift in mindset, from technician to strategist, is crucial for small business success. It also advises on the importance of learning business mechanics and delegating or partnering to manage tasks outside one's skill set.

Opinions

The author believes that doing everything by oneself in a small business is a significant mistake, leading to a lack of focus on growth and strategy.
It is conveyed that small business owners should spend their time on executive functions, such as setting trajectories and problem-solving, rather than on operational tasks.
The article suggests that failing to delegate or collaborate can result in business owners becoming overwhelmed with tasks that detract from their core passion and skill set.
The author emphasizes that a transition from employee to business owner requires a fundamental shift in mindset and the acquisition of business management skills.
It is implied that partnerships or hiring staff to handle administrative duties can be a key to maintaining focus on the core functions of the business while ensuring scalability and sustainability.
The author opines that without proper structuring, a small business can become just another job with an incompetent boss—the business owner themselves.

Why Your Small Business Is Failing.

Don’t Be Like Joe the Baker.

Photo by Mike van Schoonderwalt from Pexels

A YouTube video, titled “Don't Start a Cup Cake Business”, caught my attention. It changed my perception of small businesses and brought clarity to exactly why so many of them fail.

Firstly, what do I mean by a cupcake business?

A small business that just isn't generating any results, mainly in terms of sufficient income. Mainly because an individual is doing everything themselves.

This is a topic that means a lot to me because I once had a freelance business that I simply sucked at running.

At the time, I didn't understand exactly why it wasn't going anywhere.

When I look back through my evolved eyes, I now understand exactly why that was the case.

Here’s What I Did Wrong in a Nutshell.

I did everything by myself.
Too much control of the business meant partnering never crossed my mind.
Because I did everything myself, I was constantly pulled in different directions. I engaged in tasks that weren't within my skill set.
I wasn't able to manage the workload and generate leads at the same time. I didn't focus on one thing.
I let myself be defined by my work.

These are some of the pitfalls I had when I had run my freelance business.

The problem is, mainly.

Working in the business, instead of,

working on the business.

You see, if you're the one owning the business, your time needs to be geared towards executive functions as much as possible.

Let Us Use an Example To Better Understand This.

If you're running an Amazon FBA business (hope to get into this in the future).

Let's split up your ideal tasks and group them into two categories.

Deep work
Shallow work

Deep Tasks:

Product research.
Overseeing progress on workload and allocating tasks.
Setting long-term and short-term trajectories.
Growth strategy.
Problem-solving.

Shallow Tasks:

Designing product images.
Writing product descriptions.
Creating social media campaigns.
Handling customer complaints.
Email marketing.
Packaging and shipping.
Accounting.
Conversations between team members.
It goes on and on.

I hope you're able to see the difference between shallow tasks and executive tasks.

With that said, let me make this clear. I’m not saying that you should ignore shallow tasks, but they should definitely not be at the forefront of your day.

You, as an executive or owner, need to be focused on activities that drive the business forward. Anything that takes your focus away from that simply isn't worth your time but can be the priority of another team member or subordinate.

Mindset Shifts That Are Needed To Ensure Your Small Business Succeeds.

Let's use another example here (I use examples a lot because I feel it's the best way I can explain concepts to you, so please bear with me).

Let's say that, Joe is working in a prestigious bakery as professional making cakes all day.

Joe loves what he does and makes a good income from it.

2 weeks later, he meets his long-lost friend peter, who advises him to run his own cake shop since he's so good at making cakes.

He gets excited and starts to fantasize about his life as a business owner.

He then starts a business, with a vision of baking cakes all day to serve his loyal customers.

Let’s Look Into What Actually Goes Into His Day?

So he gets started, and he's excited about the 1st couple of weeks.

He then reflects on his day and realizes that he's not actually doing what he loves all day.

Instead, on focusing simply on baking cakes (his core passion).

He’s now focused on:

Generating enough monthly leads for his business.
Social media awareness.
Dealing with customer requests and complaints.
Buying ingredients and engaging in stock control.
Dealing with taxes (his employer took care of this in the past).
Managing his finances.

You see, he was never focused on any of this in the past when he was an employee. Now, when we bring everything together, we get an end result or the outcome of this situation.

What Is the End Result?

In a nutshell, this is what can happen to Joe.

Ends up working 8–12 hours a day, playing catch up with all the other tasks.
Quantity and quality of his production take a hit, due to the other tasks.
Mental health also takes a toll because he's anxious about paying bills and expenses.
Taking days off to blow off some steam is a thing of the past.
Dealing with hiring and firing off staff, if he has any, that is.

With all of this in mind, you can see that there's a lot of pressure on him.

There Are a Couple of Outcomes Here.

Outcome 1:

He realizes that he can't possibly handle all that pressure and has to go back to his job where it felt comfortable. He understands that he was making much more money at his job. He can simply go back and end up thriving again.

Outcome 2:

Realizes that he's now an entrepreneur and starts prioritizing tasks based on his skill sets and creates a model that works for him. Since loves baking cakes so much, he triples down on that skill. However, it's not going to be sustainable on his own.

Ideal Outcome

Since he's passionate about his skill set, Joe should have a balance. He could triple down on that skill and partner up with someone who can look after the administrative aspect of the business.

This way, he’ll be able to focus on his passion whilst having a sense of co-ownership.

However, to truly scale, he’ll probably need to take the role of managing other bakers and engaging himself in quality control.

What Does This Tell Us?

Either way, Joe has the potential to be successful regardless of the outcomes he chooses.

However, needs to take on a different mindset if he decides to open up his own biz.

He’ll have to be comfortable taking on a different role and a different set of responsibilities.

Most importantly, he’ll have to spend time learning the mechanics of how an actual business works and grows. He should carve out time to read books and learn fundamental business principles, well before he starts his business.

Closing notes

I hope you're able to understand that, the most important thing that needs to occur if you're going from employee to owner is a mindset shift.

It’s important to keep in mind that, you need to take the correct steps to ensure that your small business isn't simply another job.

If You don't structure it correctly, you could end up working for a boss that simply isn't competent, and that boss is YOU.

Let Me Just Summarize What We’ve Covered in This Article.

My experience of failing at running a small freelance business, everything that I did wrong.
Concept of deep work and shallow work.
Using an example of Joe the baker and the struggles he faces running his own small business.
Exploring different end outcomes for Joe and his small business.
Summarizing everything we’ve learned through the examples.

Thank you for reading, and I hope you were able to take something home with you.