Big Business Lessons For Small Business
June 13, 2006

Q:  I work for a large, Fortune 500 company.  My wife owns her own business.  While I admire her initiative and hard work, I am often surprised at how haphazardly small business owners seem to run their businesses.  Don't you think they would be more successful if they were more organized? -- Jeremy, Toronto

A:  I think you are indeed on to something. Of course I usually write about how entrepreneurs have the creativity, drive, and dexterity to respond to the market, make smart decisions, and thereby create special businesses in the process. But lately, I have seen the other side of the coin. I have been fortunate enough recently to work with some great large corporations and have come to appreciate what they do right.

Every big business started out as a small business, and whether you want your small business to grow big or not, the fact is, there is plenty to be learned from large corporations.

Here then are my Top 5 Big Business Lessons for Small Business:

1. There's Power in Numbers: The fatal flaw for many a small business is that they too often work in a vacuum. "I noticed there are no office buildings along that stretch of highway," a friend recently observed. "I think I will build one," he added.

Now, it seemed clear to me that there were no offices in that particular area because it was mostly residential. The problem my friend had is the problem many small business owners have, namely, every idea becomes equally important because there is no one around to knock down the dumb ones out of the box.

But large corporations have built-in feedback systems. Ideas are shared and examined and vetted because many people are involved and vested in the process; the collective wisdom of the whole slowly, oh so slowly, separates the wheat from the chaff.

That is why it is smart for the small business owner to have a board of directors or advisors. It might even behoove you to create an informal group of likeminded entrepreneurs who can get together once a month or so and share ideas. Feedback is critical for big business and it should be for us too.

2. Be Thorough: Large corporations, for the most part, make decisions fairly slowly, and even then, only after fully analyzing a situation or opportunity. No corporation would build a new office on my pal's road until the idea has been thoroughly analyzed and research confirmed that it is a financially viable idea.

While such thoroughness is definitely time-consuming, and whereas the ability to respond quickly is a hallmark of small business, it is nevertheless true that most small businesses make decisions on a fairly ad hoc, go-with-your-gut basis. A little more thoroughness probably would not hurt.

3. Think Ahead: As a result of that thoroughness, large companies tend to think and plan far more into the future than your average small business person. Moreover, they often test an idea to see if it works before rolling it out. But because small businesses live and die so much by cash flow, long-term planning for us too often is "what does the bank balance allow for this month?"

There is much to be said for coming up with a long-term growth plan, testing it, implementing it, and then seeing it through.

4. Use Specialists: One of the things I am most jealous of with regard to my big business brethren is the wide array of specialists they can tap when it comes to working on a project. Not only do they have the budget to bring in the best, but they also simply have a vast network of fellow employees with various skill sets with which to tap. This means that the tech guy handles the technical problems and the PR woman handles the public relations. Sure beats having my brother try and fix my computer.

5. Plan Big: Notice I did not say "Think Big." Most people in business like to think big, but large companies take the next logical step and come up with a plan to execute on those big ideas. Yep, we should do that more often too.

While most small business owners would not ever go back to the previous big business life from whence they emerged, remembering what large corporations do right can reap tremendous rewards.

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Today's Tip: Of course you know to read the entire contract before signing it, but it is usually equally important to consider what is NOT in the contract. Items not covered are, well, not covered. So it is always important to ask yourself if there is anything additional you will need to fulfill your end of the bargain. If so, get it in there.

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