A management consulting firm declared that it is not the economy that is totally responsible for the problems at a small business, it is that business's own waste.
George S. May International did a survey of 1,000 small business owners and found that 45% said their businesses were not profitable. Furthermore, 60% of the respondents said the economy was to blame for their business not being profitable or not as profitable as it could be.
But executives at the company said the No. 1 problem plaguing small businesses is waste.
"Many business owners feel that the recession is to blame for all of their woes, but that's simply not the case and is actually part of a bigger problem," said Paul Rauseo, managing director of George S. May International. "There are plenty of small businesses making money in this economy because they are taking care of the business side of the business - controlling costs and increasing productivity."
He added the economy and competition are just convenient excuses and are not the main reasons for a firm's success or failure. Rather, "the management of the business and overall company efficiencies are the more powerful determining factors on whether or not your business will succeed or fail."
Businesses, Mr. Rauseo continued, need to identify wasted assets, profits, business opportunities, services, action, technologies and talents. The real problem is that management lacks the business intelligence to identify what their wastes are.
Meanwhile, a report from Diamond Management & Technology Consultants Ltd., London, said that businesses are failing to take advantage of their online assets.
The firm said most online investments are disproportionately geared to cosmetic Web site upgrades.
But online is not another channel, Diamond continued. It is central to a business and should be treated as such. It gave an example of a financial institution which used an online community to achieve a 40% increase in new account openings.
Said Stephen Warrington, managing director of Diamond's United Kingdom practice, "especially during a downturn, strategic online investments can help companies gain a competitive edge. Designing and executing the right online strategy can materially improve the customer experience, revenue and cost performance, delivering benefits such as improved sales, greater marketing return on investment, lower acquisition and servicing costs, and improved speed to market."
Companies must take three steps towards modernizing their online capabilities:
1. Define a distinctive customer experience proposition;
2. Identify the necessary operational and technology capabilities; and
3. Create energy and momentum.
George S. May International is headquartered in Park Ridge, Ill. Its website is
