March Madness – the NCAA men’s basketball tournament – is getting underway. Sports fans consider it one of the most exciting events of the year, with 68 college basketball teams battling it out for the national title over the course of three weeks.
Small business owners can no doubt relate to one of the most electrifying aspects of the tournament: watching smaller or lesser-known schools take on top-seeded opponents that are favored to win. Many a “Cinderella” underdog has made it to the Final Four by outmaneuvering or outplaying a more respected team. While competing against larger or more well-known businesses in your industry may seem daunting, there are some lessons to be learned from March Madness about the skill, strategy, and drive it takes to win.
It takes plenty of preparation for a No. 16 seed to beat a No. 1 seed. Coaches and players study the competition with an eye for weaknesses they can use to their advantage. At the same time, they must shore up vulnerabilities in their own team that the competitor could exploit.
Sometimes more established teams become over confident and disregard a smaller team’s strengths. On the court, this can spell disaster. Off the court, when a larger business rests on its laurels, it opens the door for smaller competitors to steal market share.
Small business owners need to know what their competitors are doing and be prepared to take advantage of opportunities when they arise. Follow your competition on social media and link to similar groups and companies. Sign up for newsletters and marketing materials from competing companies so you know what initiatives, events, and changes are taking place. Set up Google alerts for company names as well as the names of the principals of your top competitors.
It’s also important to assess your own business strengths and weaknesses and analyze possible opportunities and threats. Being prepared for a change in the market or the loss of a valuable customer will leave you less vulnerable and more in control of your company’s future.
Plan for Success
Winning coaches have a game plan for success, and the same should hold true for small business owners. Entrepreneurs are often so eager to get up and running that the last thing they want to do is spend time crafting a business plan. However, in today’s highly competitive business climate, successful business owners know that a smart strategy is their best defense against failure. One of the biggest advantages a business plan provides is helping you spot problems before they happen and course correct, saving valuable time and resources.
An effective strategic plan addresses how you will handle every aspect of your business, from financial and inventory management to marketing. In addition to assessing your competition and identifying the threats and opportunities they present, you will need to consider how trends in your industry as well as in the national marketplace might affect your business in the future. A business plan also serves as a powerful tool for small business owners seeking financing or business alliances. You will be ready to share your company vision and strategy the moment an investor or potential partner expresses interest.
Keep in mind that flexibility is one of the key advantages of being a small business, so don’t be afraid to shift gears when the situation calls for it. In basketball, it’s the final score that matters. If your team is down at halftime, you often need to change your game plan to spark a comeback. Pivoting can boost your business by generating new opportunities, inspiring creative thinking, or incentivizing your team to go the extra mile.
Everyone on the basketball court wants to make the big play that propels their team to the next round of the tournament. However, sometimes it’s better to make the game-winning pass than to take the shot. Assists are just as important as baskets, and the most brilliant plays often happen when all five teammates are involved.
Creating a winning business involves building a strong team. When it comes to achieving company goals, collaboration can make the difference between triumph and failure. Business leaders who need to be the “hero” often selfishly bask in the glory of their staff’s accomplishments. This can fuel resentment and lead to increased turnover. Instead, focus on recognizing team effort. Celebrate meaningful “assists” as well as the big wins. Regularly remind your team that everyone’s role is important and that working together is the key to creating happy customers.
Going for a three-point shot is riskier than a layup, but the payoff is higher. An analysis of risk-taking in basketball found that when a team is winning and their lead is decreasing, they tend to become risk-averse. However, not taking enough risks when a victory is on the line can prove costly.
This also applies to small business owners. While you don’t want to bet your company’s future on a single action, decision, product, or customer, it is important to strike a balance between taking risks and playing it safe. If you find yourself hesitating when presented with an opportunity, ask yourself why and take time to analyze whether the decision you are making is based on fear of failing. You can minimize risk by making one thoughtful decision at a time and learning from the results before taking another step forward.
Remember that successful basketball players can’t afford to dwell on every loss. They know how to learn from their mistakes and keep moving forward. Mistakes come with the territory when you are running a business, but you have a better chance of bouncing back if you stay in the game.
Trust the Experts
Much of a team’s success on the basketball court is about trusting their coaches. Winning coaches typically have decades of experience and a bottomless well of wisdom, and smart players listen intently to their every word.
In business, listening to the expert voices in your professional circle is critical to making decisions that will increase your chances of a successful outcome. Consider the opinions of the people on your team who specialize in areas that are not your strengths, such as sales, marketing, or finance. Tap into your business network and have confidence in the knowledge and expertise of your colleagues. The significance of trust in forming strong, productive, and lasting relationships should never be underestimated – in the locker room or in the conference room.
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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.