You spend hours and hours agonizing about the figures, trying to figure out why your business is just falling short of a breakthrough. Month after month, your cash flow seems to be stretched to capacity and your sales seem to have reached a plateau. What can you do differently to get your business where it needs to be? More importantly, what can you do to prevent business failure?
Are You Spending Time on the Right Things?
It’s easy to look busy for the sake of it, but going in aimlessly and without focus can cost you valuable time. Time is the only resource in a business you will never get back. It also happens to determine many of the successes and failures in a business. A great way to keep on top of projects and ensure that time is spent on the right things, is by keeping yourself accountable. Ways to do this, include:
- Diarise important items and ensure you stick to them.
- Identify distractions and minimize them.
- Delegate tasks that can be delegated.
- Invest in a business planner.
Invest in the Best Staff
“Take care of your employees and they’ll take care of your business” – sir Richard Branson
Cheap labor does not only ruin the industry, it could also ruin your reputation. Workers without the right experience could cause serious damage and eat into your profit.
It’s not enough to just have the best staff, they also need to be rewarded appropriately. Staff members need to be paid on time, every time. Reward efficiency and hard work, and invest in their training. Happy employees are far more likely to take good care of customers than a disgruntled one. Staff members are, after all, a human resource.
Manage Your Cash Flow
It’s quite tempting to go out on a splurge and redecorate your house the moment the money starts coming in. The thing with the business cycle is that the income isn’t guaranteed and that not every month will be a good month. It’s important to invest money in stock and growth and to ensure that the cash flow is taken care of. Businesses who don’t manage their cash flow will constantly be on the backfoot and find it hard to experience growth. Mismanagement of cash flow is one of the biggest causes of business failure. This is true for those who need to purchase stock, as well as fund projects before payment. A good way to ensure that cash flow is not an issue, is to request deposits where possible.
You can’t work all the time and if you have a business that cannot continue without you, you could face some serious repercussions when you are unable to work. If you can’t delegate tasks to others, putting away funds for those rainy days is imperative. It’s also important to create passive streams of income, for instance, products that can be sold online. There are also special insurances for business owners that cover loss of income. If at all possible, hiring an assistant to take care of some of the minor things will help a great deal. Being spread too thinly will cause stress on one or more departments, which can lead to business failure.
It can be quite frustrating to deal with reams and reams of paper on a regular basis, but it’s a necessary task in every business. Taxes, HR, and other important document flow need to be adhered to and businesses are known to have been closed down for less. Appoint a general assistant to keep these things in order, even if they only come in a few times a month. This will ensure that everything checks out when it needs to, and you as business owner can do what you do best.
No Marketing Budget, Yep, It Can Cause Business Failure
Technology is moving at a much faster pace than ever before. Businesses who are popular very rarely have to close their doors, but not everyone can rely on word-of-mouth. This is especially true for new businesses. Part of the expenditure planned for the business should be marketing. If this is not part of the business cash flow forecast, rather close the business and move on to something else. That may sound harsh but it’s important to remain relevant.
Underquoting and Overquoting
Nothing is more damaging to an industry than a business underquoting. This is not only bad for the business providing the quote, but also the rest of the industry. Customers are reluctant to pay higher prices and will not accept steep increases in the future. This means that the business will always only scrape the bottom of the barrel.
Overquoting is another issue. Do research on the industry norms and price according to your skills and experience. Every industry has a quoting soft spot. Find out where this is and quote accordingly.
Selling What You Want to Sell, Not What the Customer Wants
There are some pretty small niches where the likes of Chanel and Andy Warhol pioneered different movements in their respective fields, but this is not the norm. Bear this in mind when selling a service or product that is very niche-based. Market research and proper placement of the business can make a difference.
Making a few minor adjustments and getting back on track could save a business and steer it in the right direction. Take a breather, work out a plan, and steer the course. Business failure doesn’t have to be on the cards, as long as you play those cards right.