Everywhere you turn these days there are new pitfalls for your business. Open the mail and there is another notice about how your bank or credit card company or someone has changed the rules about your relationship with them. Turn on the radio and there is yet another announcement about a change in tax policy, a new regulation or a local ordinance that is going to adversely impact your business. Unfortunately small business owners and entrepreneurs seem to be swimming upstream during a torrential flood when it comes to all of these changes.

Small business owners are more vulnerable to the tax changes, new regulations and increasing complexity of doing business. Small businesses as a category are responsible for the majority of growth, innovation and jobs in the United States, yet when it comes down to the power to impact the mindset of government, or to be “courted” with tax breaks and incentives, it is major corporations and big businesses that have the influence, most of which seems to negatively impact the small business.

When individual practitioners, small businesses and entrepreneurial startups enter negotiations for better credit terms, more access to capital sources and more equitable legislation, the story is much like little red riding hood going to visit her grandmother. The wolf is waiting to pounce and even if the business escapes intact and with “fair” terms, it seems almost inevitable that the the big bad wolf will once again be threatening their existence.

How can small businesses break this fairy-tale cycle? The answer is much like the story of the third little pig. If a business take its time and build its house on a good foundation, it will have the ability to withstand many, if not all the threats that come its way. The wolf can come to the door. He can huff and he can puff, but the foundation and structure the business has built will stand.

The Third Pig

Remember the classic fairy tale of the three little pigs? They were told by their mother to go out and seek their fortune. To accomplish this she advised that they do their very best at all things. As the story goes, the first and second little pigs took the easy route and built their houses of straw and sticks, respectively. The third little pig, however, wisely listened to Momma and took the time and effort to build his house of bricks, upon a firm foundation.

When the big bad wolf came prowling, the houses of the first and second little pigs did not stand. They went running to the third little pig’s brick house for shelter. His house stood against the wolf and they lived happily ever after … well, not quite. I personally suspect the wolf, or one of his many compatriots, kept coming back. I also suspect that the lesson of the big bad wolf was quickly forgotten by those same two little pigs, and it was left to the third pig to continue to think and act wisely in his house of brick.

The Brick House Business

What does a business built like a “brick house” look like? These businesses typically share some common characteristics:

  • Success is measured not just in sales revenues but in profits and positive cash flows.
  • Costs are incurred based upon need and logical decision criteria: a plan, not based upon wants and desires to have the best “toys.”
  • Customers are valued and treated with respect.
  • Service is part of the “product” package.
  • The focus is on retaining profitable customers and pursuing new profitable customers, not just on market share.
  • The business practice is to ALWAYS do the right thing.

Which pig are you? Is your business built of straw, sticks or bricks? When you need to make a decision, are you hiding in fear from the big bad wolf or are you secure in the knowledge that you have built a strong business that can weather storms of regulations, auditors and the tax man?


Author: Lea A. Strickland, MBA CMA CFM CBM GMC

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