The Case for Discipline in Small Business

“The major and measurable difference in the performance of most high achievers and top managers is how they choose to deal with unpleasant or less desirable tasks.”

Dave Yoho, Managing Yourself & Others © 

A Crucial Business Element 

Discipline or the lack of it plays a major role for a business and the individuals within that business.  Entrepreneurs and their personnel often fail to complete administration details, design and complete paperwork, respond promptly to prospects/customers or make cold calls.  Yet these tasks are basic to running a successful and profitable business.

Without diligence and discipline these individuals will often abandon necessary ongoing efforts and experience failure.  Many managers are frequently limited in enforcement capabilities.  Attempts to force, intimidate or cajole staffs may work, but for only a brief period. 

The key is for the individual to understand the importance of these less glamorous tasks and exhibit a high level of energy in their completion. 

Many owners of moderate sized companies wishing to grow, fail to recognize that many of their people would rather call on a familiar face than solicit new business, and companies offering ‘services’ would rather have someone call them, than make new sales calls.  Within many organizations the people tend to be comfortable doing business with certain types of people or organizations, and avoid others, regardless of sales potential – – and many of the people hired would rather make a new sale than deal with a service issue.

Individuals who employ discipline recognize the value of completing less glamorous tasks.  They do them because they realize it will help them reach their goals more rapidly. 

My consulting experience has shown me that most major corporations are highly structured, controlled by policies and have business plans.  Smaller companies and entrepreneurs seldom use any of these controls.  In many cases the owners of small businesses don’t exert the discipline necessary to undertake such plans or the necessary follow-through.  Even when these companies retain an outside consultant to prepare a plan, they frequently don’t follow it; the discipline to follow-through is often lacking.   

In large corporations, preparing forecasts, budgets, financial controls, management plans, goals and quotas are the responsibilities of managers who are then assessed and evaluated periodically.

The disciplines which are built into larger companies are often lacking in small businesses.  Entrepreneurs who do achieve financial success manage to shorten their work load, heighten their productivity and profitability, and run a more efficient business by exerting higher levels of discipline than their contemporaries.   

Fundamental Disciplines 

Most successful business owners concede that there are two businesses within every business.  The first is: Managing the business, profession or trade as well as marketing, selling and developing the products or services.  The second business is: Administering budgets, personnel selection, control and development, maintaining cash flow, monitoring return on investment, return on assets deployed, goal setting, forecasting, tax and estate planning and more.  When businesses fail, the owners often had part one working well, yet, never quite got a handle on part two.

Having knowledge of a trade or profession is not the same as running a business.   The skilled trade person who wants to open up his own company may not be qualified to do so.  The talented lawyer in a prestigious law firm who sets off on his own may not have the discipline or drive necessary to be successful, though his capability as a lawyer may be excellent.

The business of running a business requires much more than being skilled at providing services.   It involves meeting a payroll, being able to make wise purchasing decisions, maintaining a positive cash flow, ensuring profitability, making hiring and firing decisions and a host of other responsibilities.  My old friend and client, Norman Kailian, the now retired president of Appleby Window Systems, was once asked the greatest weakness he had to overcome in building his multi-division business and he said, “If I was doing it again, I would learn to hire better and slower, and when it wasn’t working to fire quicker”.  Discipline in business often requires going back to basics – – learning from your errors and making decisions logically instead of emotionally.

Many business people consider it difficult or impossible to learn how to read and analyze a balance sheet and income statement.  Many business owners don’t know how and won’t take the time or exert the discipline to learn. Ergo, they are seldom prepared for the decisions they may need to make or how to react to circumstances which occur that require change.

The Discipline To Give Up Tasks  

Many small business owners and managers tie up their time with trivial tasks that they don’t need to be handling.  Continuous growth in a small business eventually demands that someone else opens the mail and orders supplies rather than the entrepreneur.  Likewise, within an organization, if you are a manager, you have to continuously assess what tasks you can let go of.  Have the discipline to delegate and pass off menial tasks and activities that have been part of your routine and concentrate on more important things.

Managers who deal in too much trivia cannot be effective interacting with their employees.  Even if you are the best at purchasing supplies, assign that task to someone else.  The other person may never do the job as effectively as you, however, assigning someone to handle purchases frees you to investigate changes necessary to your business, or to make better long term plans.  Regular reviews, mentoring and appraisals will aid you in having confidence in your assistant or direct report. 

Monthly, create a list of the three trivial tasks which you will give up.  Once you accomplish these, move on to three more.  One of our clients hired an efficiency consultant to guide him through a similar process, thus enabling him to acquire new businesses and create divisions in his existing company.   

  Redesign your business environment to accommodate the customer as well as the employee.  Create a methodology for each task, from answering the phone to responding to the most complex problem.  The methods will be part of what we call the ‘the system.’  Everyone can be taught ‘the system’, encouraged to practice it and pass it on.  In each office the guiding message should be: “The System Reigns Supreme”.

Here is a partial conversion list which we frequently give to clients with established businesses.  Most of these apply to owners and managers in companies of almost any size.  The key element is whether the owner or manager will exercise the discipline necessary to see that these ideas are fulfilled: 

• Stop opening the mail (and don’t replace this with hovering over the desk of the person who ultimately does).
• Create a business plan each year at least 2 months before the old year ends.
• Meet with your accountant to determine projected cash needs and tax liabilities two months before year-end.
• Take a course at a local university or junior college to better understand or get updated on current accounting and tax issues.
• Prepare weekly or monthly cash flow reports.
• Stay in constant touch with your customers.  Use telephone, e-mail, and text follow-up to keep them engaged in what’s happening.  Ask for and get updated (in all cases) address, phone, cell phone and e-mail – – and send something regularly through those means to let the customer know you care.
• Create and nurture your database for all leads and inquiries not sold.
• Utilize assessments when hiring which determine if the behavior of the individual fits the job being offered.
• Create standard appraisal formats for all employees and associates.  Grade them in 10 to 12 categories [scale of (1) low to (10) high].  Review these quarterly.
• Delegate often, become a mentor and a supervisor. 

Here is a crash course in disciplined economics.  Most of it applies to individuals and businesses alike.  Start with the primary rules.  If you master this you will never grow broke:

• Spend less money than you take in.
• Don’t pay interest if you can avoid it.
• Buy at the longest terms your vendor will offer, sell at the shortest terms (if possible).  This creates healthy cash flow.
• Use your balance sheet to determine cash available – – not your checkbook.
• Don’t purchase inventory, equipment, advertising or similar services on impulse.  Use a budget forecast plan.
• Never permit desire to overbalance negotiation.
• Regulate your purchases to leverage your cash – – if you can, buy on ‘statement’.  Purchases made in the last few days of a month may not require payment for an additional 30 days.
• Send a letter to all your vendors, large and small, requesting prompt payment discounts (if they don’t already offer them).  First, state your satisfaction with their product or service, and then indicate your interest in saving by improving your and their business relations.
• If you are paying your staff on a weekly basis then change it to a bi-weekly basis.  You write 26 less checks per person per year, improve your cash flow and reduce the accounting entries. 

Discipline: Internal Or External 

Discipline also means preparing for and adjusting to changes in your marketplace, the economy and public tastes.  Discipline means not permitting others to convince you that things are unworkable.  It may require avoiding those people or situations which create doubt, lower your integrity or morals, or ask you to question your disciplines.

The discipline that you display has a strong impact on your associates and customers.  Almost everything you do in life and business will be affected by your discipline or lack of it. If you do not exercise discipline yourself, society, nature or customer created issues ultimately will.   

Discipline is the make or break component of The EPOD Theory (Energy, Persuasion, Optimism, Discipline).   In alliance with energy, persuasiveness and optimism, the business and the individual possessing discipline have all the tools for potential success. 

Byline: Dave Yoho is the President of Dave Yoho Associates (www.DaveYoho.com), the oldest, largest and most successful consulting firm that works with home improvement companies, remodelers and home services companies.