Money does grow on trees!

I remember when I was growing up my dad would often say “money doesn’t grow on trees, you know”. He is now seventy-nine and, although he has given me lots of good advice and taught me a huge amount over the years, I’m convinced that he is wrong about this!

Businesses are very much like trees, vying for their position in the market place (forest). And the start-ups and small businesses are the saplings that need to be especially resilient to survive.

What are the factors that help a small business blossom and grow?

A small business needs to develop a foundation of robust systems and processes to support itself, just as a tree lays down its roots. Many small businesses rely on a few key individuals who carry lots of useful information in their heads. This may work for a while, but without standardising processes and documenting procedures, sustainable growth will be unachievable.

A small business also needs to clearly define its strategy – what it wants to achieve, why it wants to reach that goal and how it plans to get there –otherwise it may limp along aimlessly, veer off in the wrong direction or fall by the wayside. It wouldn’t do for a tree to grow along the ground or sideways!

Resources are also very important to a business. Just as a tree needs water and nutrients, a business needs sufficient cash flow and the right staff, who are trained to meet its needs. Recruitment is often problematic for small businesses as there is a fear that the work will dry up and they will be left with unmanageable overheads. Freelancers or part-time staff are a good solution, as is outsourcing of specific tasks. Training is often neglected by small businesses as there isn’t the time to release staff from their day-to-day work. To me, this is a short-sighted approach. Well trained staff will operate more effectively and retention is generally improved as staff feel that the business is investing in them.

In a forest, trees compete for sunlight and only the strongest or those which adapt to the conditions survive. That’s also true in our competitive market place. A small business has to compete against the large businesses, with powerful brands and economies of scale. To do this, a small business must find its unique selling point, grasp its opportunities and be nimble enough to react to the ever changing environment.

And don’t forget the bugs and diseases that can stunt growth or destroy a tree. Businesses face risks every day, from launches of rival products to loss of good reputation, from system failure to loss of key staff. Small businesses rarely take time out to think about this, but it’s really important to identify those risks that could derail your operation, monitor them and mitigate their impact where possible.

There’s such a lot to consider when you are running a small business and it’s often difficult to step back from your busy day-to-day tasks and assess how everything is going. But if you get it right, your “tree” will blossom and flourish and grow money!