If you own a small business, you are not immune to failure.
What are some things you can re-evaluate your business to not only avoid failure, but be profitable? Consider these:
Mistake #1: Your company is not set up to be very, very profitable.
Growth, creativity, owner-whims, excessive overhead, and an owner’s high lifestyle can all reduce profits. Likewise, the owner sets revenue and profit goals based on “what’s reasonable” or the competition.
Mistake #2: The company is not being managed.
To manage means to direct, control, support, challenge, create and always be “at cause”. Sometimes the owner delegates too much to team members which are ill-equipped for the tasks or lets the client or the market determine the direction of the company.
Mistake #3: The company is not intimate with its customers.
Polls and surveys are not nearly good enough! If a partnership is lacking, the company is not learning about new products the client wants.
Mistake #4: Company is in the wrong market or in a location that the competition is overwhelming.
Sometimes a company just can’t compete with well-capitalized, better-trained competitors. Sometimes a company is trying to sell a product which is too new or too old, perhaps not keeping up with technology or having technology that serves little purpose for the target clients.
Mistake #5: Owner has personal problems, is “green”, or trying to prove something.
Some owners have too much ego, weak personal foundations, or addictions to be able to run a company well. Some owners are lacking “good judgment” and haven’t yet learned their lessons.
Mistake #6: The company has poor systems and no clear vision.
Quantity comes ahead of quality, the minimum amount of work is being done, and no commitment exists to excellence. Company operates “on the edge”; cash flow is poor, deliveries are late, etc. Lots of chaos, commotion.
Mistake #7: Staff is not fully developed.
Staff are left on their own to train themselves, yet expected to substantially increase profitability. Staff is resistant to mastering their functions and/or being cross-trained.
Mistake #8: Money runs out.
Cash is not controlled tightly. Too much cash is put into future projects versus maintaining a current cushion. Sales dip, which is normal, yet company has assumed consistent growth with no dips.
Mistake #9: The business owner’s lack of advanced management skills
Business owner is being run by ego versus profitability. Business owner attracts people who put up with him/her, yet aren’t contributors to the success of the business. Business owner thinks he knows more than he or she does.
Mistake #10: The business owner’s unwillingness to be guided by the financial and other facts.
Ego, creative drive, or revenue versus profit-driven.
Mistake #11: The business owner is being run by survival or other addictions or compulsions.
The business is a way to prove something. The owner is under pressure and resorts to medications for relief. The owner isn’t committed to excellence.
Mistake #12: The business owner is not applying him or herself
Treating the business like a hobby. Laziness. Inadequate structure to keep the energy, focus, drive, excitement.
If you’ve found yourself in any of these areas not leading your business as its should be, now’s the time to help someone get you on track, address the personal issues that may be holding you back, implement systems and protocols for a productive and healthy workplace, and create accountability for staying on track. It’s best to work with a professional coach who can help you in all these areas and help get you on track efficiently and effectively.