How a Business Coach Could Significantly Transform your Small Business
February 8th 2017 | By Emma Grant
- Small businesses face a range of growth-stunting external and internal issues as standard
- Business owners lack the time, skill and experience to put growth and profitability drivers in place
- A business coach can help business leaders to get to grips with working on their business rather than in it, and can transform technicians into entrepreneurs with remarkable results
- How to choose a business coach
The small business faces an array of problems on a daily basis. Some of these problems are external, such as lack of access to funding; competition; staff shortages and skills gaps; red tape; health and safety and the state of the economy. Others are internal, but are certainly nothing less of a challenge.
According to Sarah Watts, head of the Information and Advisory Services at the Institute of Directors (IoD), some of the greatest internal issues faced by the smaller business are related to cashflow; ineffective leadership; lack of effectiveness of sales and marketing initiatives; lack of a clear plan and, the biggest issue of all, lack of execution.
Are you Guilty of ‘Shelving the Strategy’?
According to Sarah Watts, small business leaders will often spend time developing strategies, only to fail to do anything with them. They’ll spend less than an hour a month working on the strategy, and in many cases will fail to communicate it to the rest of the company. Furthermore, many organisations don’t have meaningful performance measurements in place and don’t carry out regular performance analysis.
Time management, preventing clients from eating into profit margins and knowing how to correctly price services are also major problems for the small business says Sarah Watts, and numerous other commentators back up her views, including bestselling business author Bernard Marr, who cites lack of financial management as a key contributor to the stunted growth of many organisations.
Writing for Hiscox Small Business Knowledge Centre Bernard commented: “Many CEOs I know are ideas people; that means they’re great at the big picture and disruptive thinking, but less good with things like cash flow, profit margins, reducing costs, financing, etc. Small and medium businesses may not require a full-time CFO, but would do better to employ a financial consultant who can step into the role as needed.”
This is something that business and executive coach and employee engagement specialist Sanjiv Dodhia strongly agrees with, and all the issues bar none outlined by both Sarah and Bernard are widely apparent through the work he does with developing small to medium sized businesses.
Business Coaching: Commonly Misconstrued?
Business coaching is something that tends to come up against a certain degree of misunderstanding. In the past it has been pinned to consultancy roles, where experts in various disciplines such as finance, turnaround or sales and marketing for example step in with a view to pulling an ailing business out of a hole. Once the predicament has been resolved, the consultant steps away leaving the business owner to carry on solo; however comments Sanjiv, such a system only serves to temporarily bring order and stability to an organisation and, once the consultant has left, the accountability instantly falls away, as does the knowledge base and support system.
In a way, the consultancy approach can be likened to a business owner taking on an employee and, instead of teaching them how to carry out the role they took them on for, they do the job for them. The business owner then goes back to getting on with their own role, and the employee is left lacking in the knowledge and skills they need to get on with the job in their absence.
Whilst business coaching may involve elements of consultancy, it is certainly not the be all and end all. Business coaching should be a fusion of the three major areas in which business owners need help.
Three Vital Facets of Effective Business Coaching
A good business coach will combine the three major areas in which business owners need help: mindset; strategy and systemisation.
Sanjiv Dodhia is part of the ActionCOACH network. ActionCOACH works differently to consulting firms. Following their unique and proven models, the coaches look at the business in relation to the most important elements that drive profitability.
As Sarah Watts of the IoD commented, lack of execution is one of the greatest barriers to development for the smaller business. Often it is the mindset of the business owner that is behind this lack of execution. “Business owners are generally technicians. They are excellent at their craft, which is obviously crucial for the success of the business in terms of quality. However, technicians don’t tend to have natural business acumen. In other words, they are not born with the knowledge of how to develop, structure and run a business in the most effective way,” says Sanjiv.
Sanjiv says that this is precisely why the mindset aspect of the business coaching is so important. “It is designed to coax out the underlying business leader; to get them to step up to become a confident manager and leader and eventually, to think like an entrepreneur.”
Many business owners are challenged by limiting beliefs and a lack of business skills. They don’t believe the business can operate without them working in it and often feel that no one can do the job like them. The mindset part of the coaching will encourage the owner to work on the business instead of in it, and will give them the confidence to trust other people to work in it. This will greatly assist in achieving the desired goals, and to striking a far healthier work life balance.
The strategy part of the ActionCOACH process is all about the mastery of the business. “It’s about turning goals into plans and plans into results,” says Sanjiv. “After all, what is the point of having goals without a method in place to realise them?”
This is where the financial management that author Bernard Marr cited as of key importance comes in. “It’s vital to have a solid operational structure in place so that a business is able to deliver on a consistent basis,” states Sanjiv who explains that sometimes this could involve slowing a business down, because growth at too rapid a rate can be detrimental. “So we might put in structures and systems; install a division of responsibility; bring services in-house; budget and plan ahead and, of course, establish good financial control. Premature growth without such systems will lead to business distress.”
Here enters the consultancy aspect. But note: it is an aspect of the entire business coaching process, not a single focus. This part, according to Sanjiv, is all about building a roadmap that starts with the goal and works out how to arrive at it.
“This is aimed at making the business owner self-sufficient so that they have their own inset skills to continue driving the business, rather than use outside consultants for fixes that, as we said before, turn out to be only temporary.”
How to Choose a Business Coach
The combined expertise of the business owner and the experience and ability of the coach is a powerful proposition, but the choice of coach is incredibly important.
A strong business coach will have an all-round background, and will have been there right on the front line of business. Varied experience across a range of industry sectors will widen the scope of knowledge and skills. Experience in building businesses from a range of starting points and of taking products to market have to be a part of the offering.
The good thing about ActionCOACH, we think, is that it has a network of coaches. It’s not a one-man band, so each coach has access to a massive knowledge and experience bank. This means that potentially no situation, however niche or complex, is unsolvable.
Do I Really Need a Business Coach?
Many business owners wonder whether a business coach is really going to add value to their organisation. Common reactions include:
- What can a business coach teach me, I’ve been in business for years?
- How will a business coach really know how my organisation operates?
- No one understands my business like I do!
- I don’t have time to following a coaching programme
- Business coaching is only for people who don’t know what they’re doing
Having seen evidence of the success of the ActionCOACH programme, such as an increase in sales value by 126 per cent for one business, a six fold increase in conversion rate for another and a huge 236 per cent increase in profits for yet another, it was clear to see that their model had substance.
Life as a business owner can be incredibly lonely. Even when you are in partnership, it is extremely helpful to have an outside perspective. We find that having a sounding board and point of accountability keeps us motivated, and our time management has greatly improved. When the coach comes in and takes your business apart, it is amazing to see where time – and therefore profit – has been welting away needlessly.
Also with ActionCOACH there is a guarantee that if the fees are not paid for in bottom line improvement within 6 months, providing all the agreed work is done, then your money is refunded.
We would say to any business considering taking on a coach, look at it as an investment rather than a cost. Imagine that continuous access to practical, expert knowledge. That direction when significant decisions need to be made. That support when you don’t know which path to take.
“We have found working with ActionCOACH and Sanjiv on monthly coaching to be of significant value to our business. We now spend more time working on the business and have gained focus, clarity and perspective. In addition, the quarterly ‘Growth Club’ is an excellent forum for planning your next quarter’s activities, sharing ideas, discussing issues with other business owners, and networking.” Steve Grant, Managing Director: Figment
Business Coaching is NOT a Sign of Weakness
These days, everyone who is anyone surrounds themselves with coaches, advisors and experts. Athletes, sports stars and high flyers all have teams around them to support various aspects of their lives and careers.
The world of commerce, marketing and technology is so incredibly fast paced that it would be near impossible to keep up with where you need to be in order to maintain the competitive edge. This is precisely why having the right people on your side who do have their fingers on the pulse has become a necessity rather than a luxury. As ActionCOACH says, “Clearly you can survive in business without the help of a coach, but to thrive, you need to be at the top of the game!”