Albert Einstein said:
“Insanity: doing the same thing over and over again and expecting different results.”
Many small business owners try to grow their business or overcome problems by putting in more hours and working harder. Is this insanity? A better course of action is to know when it’s time to make changes and find workable solutions that will move you forward.
Identify when you need to make changes
There are many different indicators that you can use to determine when it’s time to make changes. Here are some:
- Your revenue is dropping. Monitor your financial statements regularly to detect trends so you can address issues before they develop into catastrophes. Maybe a certain product line isn’t moving and you need to drop it. Maybe your prices are too high or too low for the services you’re offering. Pinpoint the cause of a drop in sales, declining profits, or a cash flow problem.
- There’s high turnover. Why is it that some companies can retain employee loyalty for years while others see people continually come and go? Are you treating employees well by providing training, listening to their concerns, and offering fair pay and good benefits?
- You face new laws or regulations. This is bound to happen. Just be sure to identify the changes you have to make. For example, the Affordable Care Act requires companies with 50 or more full-time and full-time equivalent employees to offer affordable health coverage or pay a penalty. The penalty for those with 50 to 99 employees starts in 2016, so if you fall in this category you may need to change your compensation packages, institute new record-keeping rules, and find ways to pay for the added cost of coverage.
- There’s new technology. Is it a game changer in your industry? Is it a device or software that can help you? What would it cost you to implement it (and can you afford not to)?
ACE Metal Crafts, a stainless steel fabrication company that I referred to in a previous blog post, had moved operations to an alternate facility. Its business was growing, which is a good thing. But because of growth its prior systems were no longer working. This company knew it needed a change.
Seek the right solutions
While many people discuss their personal problems with their barbers or hairdressers, it’s probably not a good idea to take business advice from them. Instead, there are various types of people from whom you can find solutions to your business problems:
- Your customers. Ask them what do they want and need? This can help you change your business offering.
- Experts. You may need to bring in outside help to make significant changes in your operations. For example, ACE that I mentioned earlier used the Toyota Production System (TPS) with the help of folks from Toyota to make the changes it needed in its new facility. This system taught the company to use a philosophy of continuous improvement to make necessary changes that helped the company gain control and continue to grow its revenue and people. You can view a short film about the Toyota Effect to learn more about how TPS helps make changes.
- Your competitors. While you likely won’t engage in intimate conversations, you can see what they’re doing and you’re not. This will show you which changes may be helpful to your business.
- Mentors. It’s always helpful to seek advice from someone who’s been where you are now and can guide you through changes. The SBA has suggestions on finding a mentor. You may want to join a business group, such as Vistage, where other business owners co-mentor each other.
Ernest Hemingway said:
“Never confuse movement with action.”
Working harder won’t fix problems. Identifying what needs to be done and finding great solutions that you can implement will lead to change.
This post was created in partnership with Toyota. All opinions expressed in the post are my own and not those of Toyota.