Every industry today have got badly affected by the COVID 19 pandemic. The hospitality industry is one of the most adversely affected. Many of these businesses suffered massive failures.

Hao Lam, one of the Forbs Council Member, shares some of the failures that he has experienced while running a small business that can be helpful for other businesses in the industry. He says some of the lessons that he learned from his own business failure made him into a successful businessman.

Here are some of the key learnings he wants to share.

Investors and Founders must be on the Same Page

Business owners make a mistake when all their business investors are not well informed about the business endeavours. When clear and structures goals are outlined along with the mention of timelines and expectations, it makes sure that the investors are equally supportive in taking the business in the right direction. The current situations must always be accessed and must be discussed with the investors before making big decisions.

A Good Team Takes you forward   

The right team will be made up of developers, managers, and supervisors. These people will ensure that your entire business will be greater than all of its parts. It is important that the founders carefully assemble the leadership teams who have an interest in the business.

It is also important for small business owners to hire the right team members. Each of the employees must have a unique skill set and should be responsible for carrying out his or her assigned task. Moreover, it is also important that each employee personally embodies the core values of the business.

Do Not Rely on a Single Team Member

The small and medium-sized business owner must never rely on a single team member. The founders of the business have an impression that the senior manager of their organization can make or break their business. This is not always true; the senior manager must be in control of the business. Moreover, the team members must be more connected to the business and its owners than the senior manager.

Tracking the Most Important KPI is Important

As a small business owner, it is important to understand and track the Key Performance Indicators (KPI). These may include the cost of the required resources, the permanent employees, the freelancers, and taxes. A failure in tracking the right KPIs can restrict you from developing a highly profitable business that can be easily scaled. These KPI’s will help you to keep track of your costs and manage them in the best possible way.

Defining SOP

Some of the small and medium-sized business owners fail to define their Standard Operating Procedures (SOP). They rely too much on the people, which is not the right way to go. The absence of SOP will restrict your business to scale for the future. The overall business turnover will also be high, and you will spend a lot of time and money hiring and training more and more employees.

It is impossible to document each and every business procedure. It is good if you document and outline at least the top 20% of the business procedures.

Being an entrepreneur is extremely challenging in today’s market environment. However, thoughtful communication, preparation, and analysis will help you to achieve your goals. It is also important that you adjust your business processes as per the changing industry standards.

Source – Forbes