Although our research Small business: the big challenges of sustainability was conducted pre Covid-19, the findings are as relevant, if not more so, to the challenges small businesses face now of sustaining themselves through incomparable circumstances. We're not talking about growth, we're not talking about the problems of handing down from one generation to the next, as is the case in family businesses. We’re talking about being able to maintain a presence, a market, and to just keep delivering the products and services that customers want.

One of the things that Covid-19 has highlighted is the importance of the ability to pivot your business, to adjust or innovate according to changes in the external environment. 

All of the challenges we identified have possible responses and these responses require new learning and development on the part of the small business owners and their leadership teams.

Understanding your business

Firstly, it is imperative to really understand the capability of your business; what needs do we meet? Which customers do we delight and how do we do it? A skills audit of the senior team can identify who is good at what, what skills are required and what gaps are evident. It is so important when it comes to leadership, that the owner and leadership team are self-aware, that they know their strengths. This has to be an honest and accurate analysis, not just a cursory think or, even worse, wishful thinking.

Consider undertaking personality tests and get feedback from people so that where strengths are identified they can then be complemented with people who have different strengths.

As Neil Muffitt advised in our webinar, Learn how to sustain a small business: the big challenges of sustainability, you really need to know all aspects of your business. You need to know what your profitable products are, what your cost of production is, and your total wage bill. Many people are reluctant to engage with numbers and although you can delegate the preparation of these figures, there is no delegation of understanding them. Acquiring that financial knowledge often means learning and studying.

How do you learn to solve problems? Adaptability is something that can be learned, it can be acquired by learning problem solving techniques.

Another challenge our research identified was how many small businesses lack resources, one of which is having the right people. There is a lack of general management skills across many functions of the business. Alongside the importance of understanding financial information and using it to make decisions, there must be, for example, an in-depth understanding of marketing and communications to identify and engage customers.

Whatever the function, management of it invariably requires an ability to manage people and therefore possess relationship skills. This brings us back to self-awareness. If we understand our personality and our level of emotional intelligence, there is much more scope for personal development and improvement.

Explore the many resources out there to help people gain better insights into themselves. Acquire new insights and learn new ways of relating to people because, while relationship skills are absolutely essential for management, they are critical for engaging with customers, suppliers, dealing with lenders – all your stakeholders.

The bigger picture

Being able to see the bigger picture is another challenge we found that SME owners face. This can be addressed with a basic knowledge of strategic planning tools. Even undertaking a simple SWOT or PESTLE analysis is a good place to start.

As Neil Muffitt advised, you must have a plan. There is no excuse for not having one. Although many plans and predictions may be based on best guesses, who is a better placed person to make that guess than an SME owner, the person who knows the business, knows your customer and knows your markets? While you can't predict the future, simply write down your best guess as to what might happen, if not only because lenders will always want to see a plan.

Lenders want to see owners who have a vision and are future focused, owners whose understanding of the business can be evidenced by knowing the numbers and demonstrating basic strategic planning approaches. One of the things that Covid-19 has highlighted is the importance of the ability to pivot your business, to adjust or innovate according to changes in the external environment. We've seen so many brilliant examples recently of innovations such as independent food retailers offering contactless collection, delivery to vulnerable people or the creation of isolation survival kits.

So how do you learn to solve problems? Adaptability is something that can be learned, it can be acquired by learning problem solving techniques. You can choose a technique and adopt that approach, but my best advice in any problem-solving situation is to stay in the moment of defining the problem for as long as you can. You will find that the better the definition, the better the solution and the more numerous options will be open to you. If you rush quickly to a solution it may not be the best and very often will be a quick fix.

The numerous challenges of small business ownership can be met with learning, and the learning is about leadership and management in its broadest sense.

Check out The Institute of Leadership & Management’s award-winning, leadership development e-learning tool, MyLeadership, to develop your leadership capability.  

Interested in this topic? Read Managing the ‘business growth versus leadership growth’ juggle.