Blind spots sap firm's potential

By Andy Barfuss
Brigham Young University
Published: Sunday, April 6, 2008 12:55 a.m. MDT
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2008 is starting to look like a difficult year for many small businesses — but not all. Some small businesses are on track to have their best year ever. Lean years are often the perfect time to fine-tune your business so it performs well during tough times and exceptionally well when things improve.

Do you believe your business is performing at its optimal level? Are you performing at your optimal level? If not, why not? It may be that you have a blind spot — something that you can't see but is nonetheless real — that is preventing you from reaching your potential.

Years ago I was a banker. Over the course of just a few weeks I had the owners of two different lumberyards approach me seeking loans for their businesses. The lumberyards were both located on the Wasatch Front less than 45 minutes apart. They were relatively similar in size and had roughly the same target customer base. But that's where the similarity ended.

Lumberyard A needed a loan because it was struggling. The owner was a second-generation manager of a 50-year-old business who told me how tough the market was and how they were waiting out a down cycle. They needed capital to meet their immediate cash needs and were planning to borrow against their assets so they could get by until business improved. Lumberyard B needed a loan to expand. Its net profit percentage was twice that of lumberyard A and it needed more inventory to meet the growing demand for its products.

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I spent a lot of time wondering about those two businesses. They seemed to be a perfect case study on management's impact on a business. The owner of lumberyard A had no idea someone with an almost identical set of circumstances could be thriving while he was struggling. He had a big "blind spot" that prevented him from confronting and resolving the weaknesses in his business because in his paradigm he thought everyone was struggling just like him.

All entrepreneurs have blind spots. Here are a few of the most common:

Unawareness of deficiencies: If you aren't able to identify your blind spots, or even the potential that you have them, it is unlikely that you will be able to correct them.

Unfounded assumptions: This is when you assume things are different than they really are. For example:

— Do you assume your customers are generally satisfied with your company? What if they are really buying from you because they don't have a reasonable alternative nearby? What will happen to your business when one becomes available?

— Do you know how you really compare to your competition, or are you assuming you're doing OK because people (at least some of the time) are buying from you?

— Do you know why — or if — you matter to your customers? When you ask, be prepared to be surprised — and it might not be pleasant.

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I recently accepted a position at a well known firm in Utah. Since…

Anonymous | April 6, 2008 at 6:04 p.m.