What keeps you up at night as a CEO or business owner?
I recently read an article by Tim Fulton, the founder of Small Business Matters, that outlined some common fears that a business owner or CEO worries over.
Here are the Top 5:
- Losing a Key Employee
Businesses are finding it increasingly difficult to find employees with the right fit for their organization. Our population is aging and the number of workers coming up to fill slots for from retiring employees is getting difficult. When a key employee leaves a company, they are usually not leaving for just the money, but more intrinsic issues.
How do you avoid this possibility? Tim recommends holding a meeting 30 days after hiring an employee and asking a simple question: “What does it take for you to stay?” Research has shown that after about 30 days an employee may be considering leaving because they don’t see the company as a “fit.”
- Losing a Key Customer
It is difficult enough to acquire a customer, so when we lose one, especially an important one, it is both a financial and a psychological hit to the company. Tim notes that too many companies devote resources to attracting new customers versus keeping existing ones.
One way to avoid this that Tim recommends is by using the Net Promoter Score (NPS). I have actually used this in my business and it is always informative. You ask one simple question to your customers: “On a scale of 1 – 10, what is the likelihood that you would refer a colleague to do business with us”? If the answer is a 9 or 10, great! If it’s less than 7, you may have a customer service and value proposition issue.
- Experiencing a Cyber Attack
“Cybersecurity is a silent killer. It can shut you down like nothing else.” – Joe Galvin, Chief Research Officer, Vistage International
Cyberattack is a relatively new fear for small business operators. In a recent Vistage survey, 62% of CEOs do not currently have an active cybersecurity strategy in place. Every day, small businesses hit by cyberattacks are losing data, cash, customer records, employee information, and employee/customer trust.
How to prevent this? Tim recommends implementing a three-layered defense against cyberattacks including working with your IT services provider to implement cybersecurity, enforcing proper employee policies and procedures, and buying cyber insurance.
- Running Out of Cash
When you run out of cash it’s game over! One of my favorite quotes is by Hemingway when asked how he went bankrupt: “Slowly, then all of the sudden.” This can happen when you are not paying attention and monitoring your finances with forecasts to look forward.
Tim recommends making sure to calculate your “working capital requirement” number. This is a number that tells you how much cash you need on hand to run your business effectively. In our Numbers NavigatorTMsoftware our clients get to know this number each month and why it’s so important to monitor.
- Lack of an Exit Strategy
We all exit our business, it’s just a matter of how we want to go out: Gracefully or with a big bang that could hurt your family, employees, and other stakeholders. Every business should plan for succession and exit on a regular basis. The decisions you make today will impact how you can exit down the road.
Tim recommends a book authored by Patrick Ungashick titled “Dancing in the End Zone.” I have read the book and also highly recommend it. Ungashick has outlined some key questions that you need to ask yourself and the book goes on to help you outline what could be the options for you and your team.
These are just a few fears that can keep a CEO and business owner up at night with worry. However, by putting the recommended strategies into place, you can alleviate some of these fears.
Cheers to a good night’s rest after you implement these strategies!
Mike