The patterns become impossible to ignore.
Over the last 2 decades I have had a bird’s eye view into Australian small business, the challenges, successes, ups and downs. My clients have let their guard down to let me see how their businesses work, sometimes when it’s not pretty to look at.
After seeing so many businesses, you can see the patterns. In fact, I can pretty quickly pick them up even after a short conversation.
The industries change. The business models are different. The personalities of the owners vary enormously. Yet the same themes appear time and time again.
After writing more than 2,500 business plans, I’ve become convinced that business success has far less to do with brilliant ideas and more often, it’s determined by nimbleness, preparation, clarity, discipline and execution.
Here are some of the lessons that continue to stand out.
Most business owners don’t start because they’re ready, they start because they’re passionate.
One of the biggest misconceptions about entrepreneurship is that passion is enough.
It certainly helps. In fact, it’s almost impossible to build a successful business without it. The commitment and resilience I’ve seen from small business owners is inspiring. Many owners have invested their life savings, worked extraordinary hours and continued through setbacks that would cause most people to walk away.
The problem isn’t a lack of commitment. It’s that many people enter business without understanding how many different skills are required to run it.
Mostly they know their trade exceptionally well. They know how to build houses, repair vehicles, prepare meals, provide healthcare or develop software. Running the business itself, however, requires a much broader set of skills, including financial management, marketing, pricing, leadership, recruitment, compliance and strategic planning, to name just a few.
The businesses that succeed are not always exciting.
Conversations in the business media and social media – with much attention given to superstar businesses – would have us think that business success needs an amazing breakthrough: a marketing hack, an AI tool or a sales strategy that changes everything.
Those things can help, but I have seen many businesses with large revenues and profits, in industries that get no attention at all. That has included revenues in the tens of millions, for businesses you have never heard of.
Big opportunities can sit under the radar.
Small business owners often speak a different language.
One thing I’ve noticed over the years is that small business owners often find themselves speaking a different language to banks, government agencies and larger organisations. It’s not because they don’t understand their own business, but each group is looking at the business through a different lens.
Business owners naturally focus on day-to-day operations, their customers, staff, cash flow and marketing. Banks are thinking about risk and repayment. Government is focused on policy, compliance and outcomes. Larger organisations tend to look for governance, systems and long-term capability. Everyone is talking about the same business, but they are using different language.
I think this is one of the reasons many small businesses become frustrated. They know they have a good business, but they’re being asked to explain it using terminology they’ve never had to use before, to meet criteria they don’t always understand (or care about). One of the biggest values of a business plan is that it helps bridge that gap, translating the business into language that decision-makers understand.
Passion starts the journey, but resilience finishes it.
If there’s one thing almost every business owner has in common, it’s passion. I’ve met people who’ve mortgaged their homes, started businesses after arriving in Australia, rebuilt after setbacks and worked extraordinary hours to create something they genuinely believe in. Passion gets people started.
In the long term, however, that isn’t enough to see the business reach its peak. What keeps businesses growing, thriving and surviving is resilience. The businesses that survive difficult periods aren’t always the smartest or the best funded. More often, they’re led by people who keep adapting, keep learning and simply refuse to give up.
The biggest challenge today isn’t working harder.
Business owners are expected to understand marketing, artificial intelligence, cybersecurity, employment law, taxation, technology, customer service and finance, while simultaneously delivering the product or service that brought them into business in the first place.
It’s no surprise that so many feel overwhelmed.
In my experience, overwhelm rarely comes from a lack of ability. More often, it comes from trying to juggle too many competing priorities without the information they need. When everything feels important, it’s difficult to know where to focus.
This is where planning becomes so valuable. It doesn’t reduce the number of challenges a business owner faces, but it does provide a framework for deciding what deserves attention now, what can wait and what doesn’t align with the long-term direction of the business.
Understanding the numbers changes everything.
One of the biggest differences I see between stronger businesses and those that constantly struggle is how well the owner understands the financial side of the business.
It’s not about being an accountant. It’s about understanding the numbers that drive good decisions.
Revenue is only part of the picture. Margins, cash flow, pricing and profitability are often far more important, yet they’re the areas many business owners feel least confident in.
The businesses that perform well aren’t necessarily those with the highest turnover. More often, they’re the ones where the owner understands their numbers well enough to spot problems early, identify opportunities and make informed decisions with confidence.
The best advisers understand small business.
I’ve worked alongside some exceptional accountants, lawyers, consultants and advisers over the years.
I’ve also seen advice that is technically correct but almost impossible for a small business owner to implement.
Running a small business is different. Owners have limited time, limited cash flow and dozens of competing priorities. Advice that looks sensible on paper doesn’t always work in the real world.
The best advisers for small business understand small business; they take the time to understand the business and business owner before offering solutions. They ask good questions, challenge assumptions where needed and provide practical advice that reflects the realities of running a small business.
Technical knowledge is important. But understanding how small businesses actually operate is what turns good advice into valuable advice.
Every business has blind spots.
Perhaps the biggest lesson I’ve learned is that every business has blind spots.
Not because business owners lack experience or knowledge. Usually, it’s the opposite. They’re so close to the business that it’s difficult to step back and see it from another perspective.
When people develop their own plans, they naturally focus on what they know well—their products, their customers and their experience. What’s harder is challenging the assumptions they’ve been making for years or identifying opportunities they haven’t considered.
That’s why I believe an external perspective is so valuable. It doesn’t replace the owner’s knowledge. It complements it.
Sometimes the greatest value isn’t providing answers. It’s asking the questions that nobody inside the business has thought to ask.
Business owners often have the answers.
One thing that has surprised me over the years is how often business owners already know the answer to the problem they’re facing. They usually know which customers they want to target. They know which parts of the business make money. They know which products or services are underperforming. They often even know the difficult decisions they’ve been avoiding.
The challenge isn’t a lack of knowledge. More often than not, I’m not giving them the answers. I’m helping them uncover the answers they already had.
Dr Warren Harmer