It’s Official – Size does matter!
The Australian Taxation Office has just compiled a snapshot of Small Business (turnovers between $75,000 -$2,000,000) by industry type and it is very revealing. Have a look at the ATO website and click through to your business type. What band is your business in? You will be most interested to see where your business lies in terms of its size and relative efficiency verses your competitors.
I have crunched the numbers the ATO has provided and a number of conclusions stand out:
* With a few exceptions, a big Small Business is best.
* Micro businesses usually run at a loss and are uncompetitive
* Medium sized businesses are the least efficient
* If you want to compete and run successful enterprise, get big.
Big Small Businesses have less costs and better profits per dollar revenue. In other words big small business is more efficient than medium small business or micro business. The implication is that growing and growing quickly from a micro business to a substantial size is the way to go.
If there is a way of avoiding being a medium sized business or a way of moving through this stage quickly, you should consider it.
When the cost of the owner/operator's wages are added back most micro businesses don’t even break even until they approach the medium size for their industry. As they break even and enter the medium size these enterprises are at the stage of maximum inefficiency and least competitiveness. Their costs per dollar revenue are the highest.
If profit is the objective and competition a concern, then growth to being a big operation is the key to winning the game called competitive business.
Obviously, exceptions occur and if you are a “tradie” or run a hair dressing/beauty/road freight business then micro is the way to go, but for the rest, Big is Best...or that’s what we told the tax man (woman).
Seamus O'Brien
Small Fish Business Coaching
www.smallfish.com.au
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Three Feet From Gold
Like many authors of non-fiction, Napoleon Hill used real life experiences to illustrate the philosophy of success that was finally to be laid down, and become known as "Think & Grow Rich". During the 20 years or more of research that went into this great masterwork, he interviewed, and counselled with, more than five hundred of the most successful men in America. From these priceless interviews, he was able to reduce the mysteries of that elusive reality called 'success' to a set of known, workable principles that we can all take advantage of. Although the short story I am going to retell here occupies a single page of the book, you should not underestimate the importance of the principle contained within it. In fact, every one of its pages contains principles and their explanations, which are equally important to YOUR success in any field.
For the purpose of accuracy and to avoid any possible misinterpretations, I have lifted this passage, bodily and verbatim, with full acknowledgements to the author, Napoleon Hill. Here's how he tells it.
"One of the most common causes of failure is the habit of quitting when one is overtaken by TEMPORARY DEFEAT. Every person is guilty of this at one time or another. An uncle of R.U. Darby was caught by the "gold fever" in the gold-rush days, and went west to dig and grow rich. He had never heard that 'more gold has been mined from the thoughts of men than has ever been taken from the earth'. He staked his claim and went to work with pick and shovel.
After weeks of labour, he was rewarded by the discovery of the shining ore. He needed machinery to bring the ore to the surface. Quietly, he covered up the mine, retraced his footsteps to his home in Williamsburg, Maryland, and told his relatives and a few neighbours of the 'strike'. They got together the money for the needed machinery, and had it shipped. The uncle and Darby went back to work the mine.
The first car of ore was mined and shipped to a smelter. The returns proved they had one of the richest mines in Colorado! A few more cars of that ore would clear the debts. Then would come the big killing in profits. Down went the drills! Up went the hopes of Darby and Uncle! Then something happened. The vein of gold ore disappeared! They had come to end of the rainbow and the pot of gold was no longer there. They drilled on, desperately trying to pick up the vein again - all to no avail.
Finally, they decided to QUIT.
They sold the machinery to a junk man for a few hundred dollars, and took the train back home. The junk man called in a mining engineer to look at the mine and do a little calculating. The engineer advised that the project had failed because the owners were not familiar with "fault lines". His calculations showed that the vein would be found 'just three feet from where the Darby’s had stopped drilling!' That is exactly where it was found! The junk man took millions of dollars in ore from the mine because he knew enough to seek expert counsel before giving up."
There was a happy ending for Darby however, later in life. In his later career as a life insurance salesman, he learned 'stick-ability' from the 'quit-ability' he had displayed in his gold mining days. He went on to become one of a small handful of men who sold over a million dollars in life insurance annually, but that's another story. Every one of the five hundred or so successful men, that he had interviewed during his research, told him that their greatest success came just one step 'beyond' the point at which defeat had overtaken them. Napoleon Hill went on to say;
"FAILURE is a trickster with a keen sense of irony and cunning. It takes great delight in tripping one when success is almost within reach."
I've thought of that story so many times over the last decade, since I was first introduced to "Think & Grow Rich", when I too have tripped and been tempted to QUIT on something, or someone. The wisdom in that story floods back to me and I'm galvanized to push on, deeper and wider, until I get through, or around, the obstacle in my path. That's the magic of "Think & Grow Rich"; it stays with you like no other book I've ever known. The moral of the story is clear-cut and simple; it has no 'hidden' meaning. It is plain to see. Read it again and again and fix it in your mind so that when 'quit-ability' rears its ugly head in your life - be reminded of Mr. Darby, the gold mine, the fault lines and the junk man - and press on.
You may just be THREE FEET FROM GOLD!
Bill Annesley
Small Fish Business Coaching
www.smallfish.com.au
Charmaine Burke 19-Apr-2010 11:38 AM
Great newsletter Bill!
Thank you.
Anita Waters 19-Apr-2010 11:39 AM
Bill,
Thankyou SO much for putting this together for us to read, this is EXACTLY what I needed to read this morning and I am going out to buy the book so I can read it over and over.
It's so tempting to quit and go in another direction sometimes because it seems like an easier option, but, in the back of my mind I feel like I am getting quite 'close' to my next goal and reading this this morning has prompted me to just KEEP GOING!!
Thanks again...
Abundance vs. Scarcity
One of my basic beliefs is that there is more than enough knowledge, wealth or anything else that matters to go around. The fact of the matter is that for most people, getting more means that someone else has to go without. Nothing could be further from the truth.
There is literally more than enough to go around. Scarcity theory was first espoused by the English Preacher Thomas Malthus, who worked out in 1798 that “the population of mankind will eventually outstrip man's ability to supply himself with the necessities of life,” yet even to this day we still produce more than enough food to feed the entire planet. He said that "population increases in a geometric ratio, while the means of subsistence increases in an arithmetic ratio.” Yet because we believe in scarcity (this is more commonly known as supply and demand) much of it gets thrown away.
The same goes for oil; 30 years ago the major oil companies were predicting reserves would begin drying up around the turn of the century. The trouble with most leaders of business and industry these days is that they have what I call an ‘accountant’s mentality.’ When times get tough, the first thing they want to do is to cut back and save instead of increasing their investment in marketing. They instinctively want to think small instead of big.
In business, you’ve got to realise that there is always more than enough money to go around. The question is, when will you go out and get your share?
Abundance is a mindset, a mindset that understands how technology has removed scarcity. How the old thoughts in economics are exactly that – old.
And because this all has to do with mindset, you really need to create the right attitude so that you can have your share of all this abundance.
And here’s another thing that may surprise you; if you have a sharing attitude you will benefit handsomely. If you were to share your money and knowledge you will get it back ten-fold. That’s the approach great leaders in the world take and Richard Branson is a prime example.
Regards,
Bill Annesley
Small Fish Business Coaching
www.smallfish.com.au
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The Benefits of Business Coaching
A recent study by the International Coach Federation (ICF) reported that among small business owners, the top six professional and business development areas identified in the study were:
- Productivity and effectiveness
- Planning
- Sales and marketing
- Business management
- Positioning their firm for the future
- Leadership
The most valuable results of the business coaching experience reported in the ICF coaching study by small business owners were:
- 28% said brainstorming was the most valuable result of business coaching
- 28% said independent viewpoint was the most valuable result of business coaching
- 18% said encouragement was the most valuable result of business coaching
- 15% said being accountable to the coach was the most valuable result of business coaching
BOTTOMLINE: Business coaching is one of the four required elements for achieving lasting business excellence (...the others being a systematic business-building methodology, practical activity alignment technologies, and an organization that is ready and able to change.)
Gordon Frandsen
Small Fish Business Coaching
www.smallfish.com.au
David Lockett 13-Apr-2010 02:20 PM
People only listen when the speaker has something that they want.
Why do we work so hard?
Nobody on their death bed said, “I wish I would have spent more time at the office”.
(Paraphrased from Heading Home by Paul Tsongas, 1941 to 1977)
Why is it you work so hard? Is it because you want to provide a good income and lifestyle for your family and yourself? Sure it is, but have you taken the steps needed to attain the income goals you deserve? If you have, or even if you haven’t, are you able to take the time to enjoy the benefits of your hard work?
If you are like many business owners, your employees probably have more time off than you do! In order to keep your employees happy, one of the many things you need to plan for is to make sure they have time off for vacations, personal needs, etc. But have you made the same plans to keep yourself happy? Probably not!
Whose fault is this? You’re right; it is that person looking back at you in the mirror!
Take a step back and look at yourself. You may feel you are working as hard as you can. You may be going as fast as you can. Still haven’t been able to get the time away that you and your family deserve. Now may the time to do something about it. Sometimes, all it takes is someone who can help you to take an objective look at your business and offer advice on ways to go and things to try. A good business coach can do just that.
A coaching process that includes the three steps of (1) conducting an audit of your present business systems and procedures, (2) supporting you in devising a plan to get more time away from the office, and (3) monitoring your and your staff’s actions to implement the changes you have determined to be important. When these three steps are implemented, many business owners have found they can have the time away from the office that they deserve and… enjoy increased profits and over-all improvement as a bonus!
Think about it. Business coaching may be just the thing you have been looking for!
Dennis Montgomery
Small Fish Business Coaching
www.smallfish.us
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