5 Traits of a Great Small Business

What separates a great business from the countless mediocre ones out there?

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Steve StraussWhat is it that separates an average small business from a great one? We all run across basic businesses every day -- they do their jobs and provide their services, however blandly or unremarkably.

But every now and then you stumble across what can only be called a great small business -- maybe the employees are sincerely enthusiastic or the service is exceptional or the value is incredible, or something else altogether. Whatever it is, the business is memorable.

I found one recently. I got my daughters a puppy and suddenly I had reason to visit pet stores for various toys and tools. Most were fine, nothing special, but then I walked into an amazing pet store: The prices were great, the staff was incredibly helpful, the place was spotless and well laid out, they even had a great return policy. Or how about this: The day after I got home, they called me to say that the dog food I had bought was just put on sale and they wanted me to come in and get a refund.

Now that is a great small business.

Jim Collins and Jerry Porras famously asked and answered this same question about large corporations in their book Good to Great. Small businesses have some similarities -- but are also quite different.

I suggest that there are five traits that make a small business great:

1. They have great teams. When venture capitalists look to invest in a new business, what is it that they look for? One thing you will always hear them say is "the team." These professional investors know that there are no shortages of good ideas out there, but it is usually the ability of the management team to execute on those ideas that can make all the difference.

I once saw a survey of franchises which sought to determine the difference between mediocre and great franchisees. The difference? The best franchises -- the ones that made money consistently, that had low turnover and high customer loyalty -- were ones where the owner treated his or her employees exceptionally well. The staff was paid well, respected and had fun at work. In turn, they did a great job for the owner. They were a great team.

Which brings me to...

2. They are fun. In the book Fish: A Remarkable Way to Boost Morale and Improve Results, the authors look at a similar question: Why are some businesses better than others? Their conclusion was that the better ones are just more fun. It only makes sense, doesn't it? A fun workplace will tend to be a more enthusiastic one. Consider too these additional business benefits of fun at work:
  • Relieves stress
  • Helps retain employees
  • Stimulates creativity
  • Increases communication
  • Resonates with customers
  • Increases productivity
  • Boosts morale

3. They take calculated risks. Of course you know that if you always do the same thing you will always get the same results. But businesses that take things to the next level are willing to be innovative. Some of those risks will pay off, others won't, but the ones that do can make all the difference.

Don't rest on your laurels, but don't take a crazy risk either. Smart, calculated risks are the hallmark of businesses that are both vibrant and growth-oriented.

4. They have BHAGs. Collins and Porras put it best in Good to Great -- great companies have what they called BHAGs -- Big, Hairy, Audacious Goals.

There are plenty of reasons to create a BHAG for your own business. As the authors point out, "A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines."

5. They are about more than money. We all love to make money, but the best small businesses have other, equally compelling values at stake in the venture.

Joe Wilson owned a small company called Haloid that he would later rename after investing in an innovative new product. Wilson kept a small index card in his wallet that was found after he passed away. It said in part: "To attain serenity through the leadership of a business which brings happiness to its workers, serves its customers and brings prosperity to its owners."
Values bigger than money.

The name of that little company that went big? Xerox. Maybe we can copy that.

Tags: best businesses, Business Trends, customer service, Good to Great, great businesses, HR, Jim Collins, management, running a business, starting a business, startups

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