Business Management Skills Tested
New data has shown that the majority of business owner-operators neglect their personal needs and have no plan to exit their business upon retirement.
The survey indicates that only 37% of owner-operators have planned for their own exit from the business and only 38% have any form of personal development plan to ensure ongoing career development and satisfaction.
64% of SME owners work more than a 40-hour week and only 45% take four weeks holiday each year. While many business owners consider they’re in business for lifestyle reasons, this is clearly not their reality.
These insights have emerged from a sample of more than 300 Small to Medium-Sized Enterprises (SMEs) in 32 industries. Respondents completed 22-point online questionnaire by EWO that generates a snap-shot of their own business, how it rates in their industry and compares it with the total sample.
Kirrily Dear, Director of ‘Eyes Wide Open’ (a pragmatic business consultancy servicing SMEs) says this survey is different because it addresses the happiness and fulfilment of the owner.
“We believe it is the first time the owner-operator’s personal needs have been acknowledged as a critical part of management. It is possible that there is a connection between business owners neglecting their personal needs as they strive to grow their business and the long terms sustainability of small businesses”.
Management Skills Gap
In the wake of a major growth surge in the size of the SME sector of the economy over the last ten years, the survey points to a serious gap in on-going management skills.
For example, only 61% of businesses completing the questionnaire set and hit their sales and profit targets in the last 12 months. 60% have defined roles, responsibilities and targets for their team, but only 55% actually conduct regular performance reviews.
However, small business owners continue to perform well as employers. 87% encourage team members to contribute ideas on improving business operations and 85% regularly offer encouragement to the team. 77% regularly discuss achieving business goals with their team.
Out in the lead is the Human Resources sector with an overall score of 73%. This industry out-performs others in internal communication and performance management. For instance, 86% of Recruitment/HR/Outplacement companies conduct regular performance reviews compared with the total sample (55%). Many also work 40 hours per week or less.
At the other end of the spectrum, the Retail trade had an average score of 44%. This sector scored below average on 19 of the 22 attributes measured. Of particular concern for this sector is the lack of planning. Only 23% had a business plan compared to 50% overall.
The questionnaire is available online for the next six months and can be completed by any SME owner-operator. Ms Dear says, “It is very thought-provoking and reminds us of key management issues that may have been forgotten in the busy-ness of day-to-day business”.
Kirrily Dear has this advice for SME owner-operators: “Take stock of why you are in business and what's important to you. It is important to be clear about these factors to ensure you are able to sustain your motivation and commitment to building a successful business. Also you need to work on reducing the extent to which the business relies on you personally. It is crucial that you keep perspective on your own health and general wellbeing”.
Survey top-line Results:
1. Recruitment, HR, Outplacement = 73%
2. Accommodation, restaurants, cafes = 66%
3. Marketing & Biz Consulting = 62%
4. Manufacturing and construction = 61%
5. Financial Planning = 59%
6. Accounting and business administration = 58%
7. Retail trade = 44%
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