BUSINESS FAILURE
It is important to learn to focus – stand back and see what is happening. The owner of a failing business often has a clouded view of things. Their priorities are askew and they are not seeing some things that should be obvious, because they are preoccupied with things that are unimportant.
When business owners are heavily involved in the running of the business, without delegating tasks to employees, they can become bogged down with the day to day technical tasks of the business, spending all their energy and efforts into keeping things operating smoothly. They don’t have time to pay attention to the bigger picture – where the business is heading, how to improve the business, goals and projections, reviewing the market, and so on. The business owner may need to step back from the daily operations to get a clearer picture of changes that need to be made.
Analyse the Problem
Are you focussing on what is important and analysing where your problems arise?
There are many questions you can ask in order to pinpoint where the problems in your business are coming from:
- Is it a lack of customers? Perhaps this is due to customers facing increased costs in other areas of their lives. Maybe your customers are moving to another 'newer' product or service.
- Did your sales go down gradually or suddenly? A gradual change could suggest that you have failed to keep improving your product or service. A sudden change might indicate that a competitor has moved into the market.
- What other things occurred at that point of time? For example change of staff, website profile down - forgot to pay for web positioning, lack of funds, withdrawal of funds from the business for personal use.
- Do you still have customers but lack resources? Not enough staff, too many staff.
- What business decisions have you made in the past year? Look at all decisions not just those that you ‘think’ may have caused your downfall.
- Do you have too much debt? Too much money spent of incidentals that do not relate to business growth e.g. flashy new office, or new office equipment you could have managed without, new car you couldn’t really afford, too much spent on entertaining etc. etc? Is this promoting a cash flow problem that is limiting your ability to buy in products or materials in order to continue running the business?
- Are there mistakes happening? Where are the mistakes stemming from?
- Are your procedures systemised? Is your business chaotic or organised? What can you do to streamline your business and make operations smoother?
