Small business helped by open mind

"The Best Secrets of Great Small Businesses" by Ray Silverstein, Sourcebooks, Inc., $14.95.

Entrepreneurs can be a stubborn, "It's MY business" group of people. Maybe that's why more than 80 percent of new businesses fail within two years of start up.

Silverstein offers a guidebook to those with an open mind -- entrepreneurs who realize they don't know what they don't know.

Here are two great ideas that will help grow your small business:

1. Connect with other entrepreneurs through a peer advisory group. Form a group by talking with others who are in business for themselves, but who realize they aren't in business by themselves.

Meet once a month to discuss "what's happening." The group becomes a knowledge base, a sounding board and an idea factory that provides solutions and reduces troubleshooting time.

2. Periodically, meet with key customers as a group. Pick their brains about what they want and what they will want. Bounce ideas off of them.

These meetings strengthen customer relationships and let you develop your next-move strategy.

Plan your agenda. It's about input; it's not a commercial.

To encourage an open forum, avoid inviting direct competitors. Ask the group what you can do to improve your product and service delivery. Don't be defensive if you hear some negative comments.

"No Man's Land - What to Do When Your Company is TOO BIG to Be Small but TOO SMALL to Be Big" by Doug Tatum, Portfolio, $24.95.

No Man's Land (NML) is occupied by firms in the 20-100 employee range. The NML Challenge: How you handle growth dictates whether you go back, go under or go on.

NML's foreign landscape comes with four, interrelated decision signposts: Market, Management, Model and Money. They seem familiar because every small business start-up plan covers them - but they take on an entirely new perspective in NML.

Market -The business suffers from identity crisis as the promise-deliver decisions multiply. Operations must keep pace with sales. Quality and on-time delivery must be maintained. That requires backroom investment. The development of real systems for accounting, customer service, HR, production/service delivery and product development takes time - and it won't be cheap.

At some point, you must deal with customer profiles. Decide which customers offer growth and profit potential versus those that have maxed out. Those that grew you into NML may not be able to grow you out. Look at sales prospecting, too. What customers are you targeting? Why? Can your existing sales force deal with these prospects?

Management - Focus on the "Man" in No Man's Land. NML is the place to leave the entrepreneurial ego. It's tough for entrepreneurs to let go, but it takes a team to grow the business. Decisions have to be made quickly; staff and customers can't wait until the owner has time. Employees must share responsibility and accountability. Can your existing workforce take the business where it needs to grow?

Having a team in place makes it easier to procure funds, too. Lenders see more value in a total organization.

Model - Businesses entering NML are built without much infrastructure. Costs are minimized (particularly labor, because the entrepreneur wears so many hats). The dynamics of Market and Management in NML create infrastructure and accompanying increases in overhead. The business model must adapt or profitability will tumble.

Money - Growing businesses usually underestimate the amount of funds required to sustain growth. Why? The owners don't really understand cash flow. It's a timing thing - the balancing act between cash receipts and cash outlays. While borrowing may be helpful, often essential, a firm can't borrow its way to growth without positive cash flow.

"Responsibility at Work - How Leading Professionals Act (or Don't Act) Responsibly" edited by Howard Gardner, Jossey-Bass, $27.95.

"It's not my problem." We've heard or said those words at various times when dealing with workplace situations. Based upon over 1,200 interviews, those laissez-faire words generate many of the real problems of organizations. Instead of stepping up, people step back. Problems are problems. Buck passing allows the problem to get one-day, one-week, one-month bigger and much harder to solve.

My favorite chapter is "Creativity and Responsibility". Mr. Gardner and others chide creative people who think that creativity gives them a free pass when it comes to responsibility. The end never justifies the means. They also praise creative people who look at creativity as the opportunity to produce their best work and help others produce the same.

Being creative isn't a trait. It is a calling. It thrives on a passion for excellence. Creativity requires an appreciation of the past - standing on the shoulders of giants - and the present. It respects the work of others.

Creativity and responsibility are bound by lack of self-interest. Caring about the present and the future of the organization and the impact on coworkers makes creativity responsible.

The book is an exercise in self-examination.