Three Keys to Small Business Success during Revolutionary Disruption Periods

Small businesses are failing across a wide variety of industries in record numbers as the repercussions from the Covid-19 response has laid waste to the viability of so many existing business models. For the past two-plus decades my co-author (Dr. Garry Bruton) and I have been interviewing small business owners. Hundreds of these have resulted in mini cases looking at various aspects of thriving (or failing) at running one’s own operation.

There is a theory of business transformation that has been adapted from the scientific literature generally referred to as Punctuated-Equilibrium Theory. When applied to business models, it basically says we go through periods of coalescence and periods of revolutionary change. There are four (or five depending upon who you want to argue with) triggers to that change and we are clearly experiencing one of those triggers now. That trigger is a combination of governmental mandates in combination with individual views of safety.

There are many business models that have been in slow decline for a long while and they may finally cease to be viable by the time we emerge from this revolutionary change period. Small businesses are in a particularly difficult position to survive this period of time and emerge not as they were (despite the appeal of that generally false, but appealing narrative), but with a new, viable business model. Three critical elements of success must be clearly understood by everyone in the organization and it is the founder's / leadership team’s responsibility to make these the focus going forward. 

1)   Pipeline

The business is only as good as its pipeline. It is irrelevant to talk about past sales or even today’s sales. What matters is the pipeline of customers. Focus must be on the development of that pipeline. What is inhibiting their desire to buy from you as opposed to your competitors? What can you do now to put your organization in a position to be the first choice of customers when they do start buying again? Customer NEED has NOT gone away. Customer DESIRES have NOT gone away. Start filling the pipeline.

2)   Eat What You Kill

Risk / Reward is inexorably tied to belief (or fear) that the entrepreneur or entrepreneurial team has the ability to develop sufficient positive cash flow to justify (a broad concept) not simply working for someone else and collecting a paycheck. So many employees at companies are removed from (and feel isolated from) the way the company gets paid. Everyone in the organization is in SALES. Make that happen again. Tie everyone to this most direct of direct concepts in business.

3) Opportunity Stems from YOUR REAL Competitive Advantages

Entrepreneurial businesses are founded upon and grow based upon their ability to observe and take advantage of opportunities. This revolutionary change period has opened up many opportunities and it can seem simultaneously daunting, exciting, and even overwhelming. The best opportunities are those that fit with your existing REAL competitive advantages. I say it a lot, but don’t allow ‘feel good’ propositions block out solid analysis of what constitutes a competitive advantage.

This is not the first and will not be the last significant revolutionary change period we will all experience. Strategic Change is continuous – just more critical when it threatens your business model.