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There's an old Jewish proverb that states, "A half-truth is still a whole lie."

I see entrepreneurs lying to themselves all the time. It often starts with an exaggeration, or a vague response to a specific question. But when you look a little closer, you soon realize that business owners aren't lying out of a malicious intent to misguide others. It's a defence mechanism for their own insecurities.

Consider a recent exchange I had with a client. I asked her why she thought her sales were so soft. She replied that her business in Europe was down, which is understandable given the current economic circumstances. She insisted that she needed a new product to get more traction in that market. So I dug a bit deeper.

Question: When was the last time you launched a new product in Europe?

Answer: Three months ago and the response has been poor.

Q: How did your investment in that product launch compare to the last investment you made when a new product of yours got introduced in Europe?

A: We worked on a lower product launch budget in Europe because sales were soft and we were trying to control costs.

Q: What is your percentage of market share in your core market of North America?

A: 3 per cent and growing modestly.

Though this is just a summary of our Q and A, but I'm pretty sure we are all thinking the same thing about now: the business owner is lying to herself.

Her insistence that the economic troubles in Europe are slowing her business' success, and that another new product will fix it, is masking the truth. In reality, her poor results could be caused by a host of issues including a more conservative investment in the product launch or an inferior product design or concept.

Subconsciously, she's overlooking the fact that the problems she's having are within her control. She should be questioning the legitimacy of the Europe product and its launch. Just as importantly, she should recognize the elephant in the room – even if Europe is sluggish, there's tremendous growth potential awaiting her in North America. But then, she'd need to confront why exactly she hasn't developed a strategy to leverage that market already.

In these situations, small business owners are in denial because their focus on outside forces takes the focus away from them and their leadership. I know this because I have done it myself.

My goal isn't to expose and shame small business owners, but to help them recognize that lying can, and does, happen. And if it can happen at the top, you can rest assured it's happening in middle and lower management as well.

The best way for a small business owner to overcome the lies they're telling themselves is simply to start telling the truth. That means an honest appraisal of the current state of the business and ensuring the future includes action items within his or her control.

My results improved when I started challenging myself and my team with questions like: "In spite of those roadblocks, what can we do, what opportunities are we overlooking, and are we trying to compensate for a weakness when we should be capitalizing on an existing strength?"

Do you want to get to the root of your business' problems and translate them into solid strategies for growth? If so, then honestly, it has to start with you.

Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.

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