When running a business, you have to keep a close eye on the warning signs. If you fail to, then you can have a business which falls into a serious minus over the years. I believe if it stays in the minus too long, then it’ll be hard to pull out even if you want do. Next,
Over the last 7 years I have worked with many different kinds of businesses. Here’s some of the warning signs I tell them to look for when going forward.
No Profit in Years
Being a successful entrepreneur takes enormous innovation and hard work. First time business owners must expect that the first 5 years will be chalk full of ups, and downs. It takes perseverance and dedication to survive the roller coaster ride that is business ownership.
The greatest indicator of success lies in the profit margin. Your output must not exceed your input. You may have just cashed a million-dollar cheque but if your expenses exceed your take home pay then you are running at a loss. Perhaps this is part in parcel of the game.Â However, when this is a continual pattern it’s now time to exam what’s really causing your business to fail, and come up with a plan to bring you back into the black.
This is why I encourage all of my clients to keep a spreadsheet of the entire profit, and loss statement. Over time it will make it easier to see a pattern.
No Love and Passion in What You Do
Love what you do and it won’t seem like work.
When your objective is more than just monetary you’ll discover that the hours it takes to drive a successful business will pass quickly. Entrepreneurs spend more than 60 hours a week supporting the growing needs of their enterprise. Knowing ahead of time that this is the level of commitment required than it stands to reason that you must truly be passionate about your business venture.
Not only will this give your company a stronger chance of survival but it will secure your future happiness. Do what you love and the rest will follow.
No Communication with Potential Customer
Customer feedback is an essential component to any successful business. This needs to be your top priority. You may have designed an amazing website alongside a fantastic product but if you really want to understand how well you’re doing you must go straight to your consumer.
Talking to potential customers can help you understand when you are running behind, and discover a plan to allow you to catch up. They are, after all, the ones who will be buying your product, and services, so their opinion really does count. Adjusting your strategies and fine tuning your processes is all part the development of a thriving business venture.
Talk to as many customers as you can! It will really pay off in the long run.
Criticism Hurts You
Feedback from any source is valid, and worth pondering. This advice even goes so far as to include unsolicited comments from friends, and family members. While it might be difficult to truly digest criticism from those close to us, it’s worthwhile putting emotions aside, and simply paying attention to the messages being given. Jot them down and thoughtfully consider their value. Perhaps there is a morsel of wisdom there that could help improve your business model.
Don’t Care About the Needs of Customers
A customer who feels valued, and taken care of will create a ripple effect for your business. Not only will strong customer support encourage repeat business it will also widen your customer base through word of mouth referrals.
You might want to look towards companies who are in the leading edge of customer service initiatives. Some companies have implemented phenomenal return policies, and even offer complimentary next day air shipping packages. Forward thinking ventures such as these aim to create an atmosphere of consideration. Customers appreciate when companies seek to provide comprehensive care that thoroughly supports their needs.
Make customer service a priority and the customer will return that support right back to you!
Word of Mouth Marketing DOESN’T Exist
Growing your business has become a multi-faceted endeavour. However, word of mouth referrals are truly your bread and butter when it comes to watering the success of any entrepreneurial idea.
Take it from Google who ran strictly on word of mouth in its early days. Imagine never having to pay for advertising and surviving simply on your reputation and referrals. That’s the power word of mouth can have on your business.
Advertising and paid marketing still have their place within the business world but if you really want to outrun your competition, focus on increasing your company’s reputation in the old fashioned way.
Not Agile enough
Flexibility is the key. Your success will be in proportion to how well you bend and adapt to the ever-changing demands of customers. Customers will give their business to the company who can support their needs in the fullest capacity.
Competition is fierce and in order to retain business you must seek to become extremely agile in your approach.
Agility can be categorized into three components; strategic, operational and portfolio. Use all three to your advantage and your company will keep up with the current!
Sometimes It’s Important to Be Cheap
Save for a rainy day! That is a motto to live by even in the business world. The market is apt to continually go through fluctuations, so be prepared. Tough times may come but if you effectively plan for them then there is a greater likelihood that you will weather the storm.
Businesses survive on capital. Strategic planning will help you ride out the difficult times. Setting aside an affordable sum at regular intervals will help you coast over rough obstacles with ease and guide your business successfully to calmer waters.
Not Knowing When to Spend Money
Spending money is not always a bad thing. Good employees are worth their weight in gold and that may require a bit more of an investment on your part. Mediocre employees may cost you less in the interim but you will end up paying dearly for them in the long-run.
A Good Lawyer On-Call
Quality is something you want to strive for in every aspect of your business and that includes legal concerns. Lawyers work on your behalf and paying them their worth will encourage continued loyalty and dedication.
There is always a way to work around expensive legal fees. Bargaining and payment plans can work in your favor if extraordinary legal costs are not in your budget.
The value of a good lawyer cannot be understated. Lawsuits and customer payment compliancy problems are a dime a dozen. A good lawyer will help you deal with any and all legal issues that arise. Invest in quality and you’ll get quality. Invest in a good lawyer and your bank account will thank you later on down the way.
Delegating Not Your Thing
Smart business owners understand the power delegation.Â A multitude of tasks require attention simultaneously and well-trained and reliable staff are more than capable of fulfilling these responsibilities. Delegation allows you the opportunity to concentrate on specific projects with the assurance that other necessary details will be taken care of properly.
Why not draw on the skillsets of others to accomplish specialized tasks? Your staff may possess a plethora of unique abilities and talents that may far exceed your own abilities. Relying on others demonstrates trust and is a smart way to run your business.
Successful delegation is a skill that must be developed and practiced. Seek to master this skill and you will find your business will run smoothly and successfully in the future.
Same Mistakes Will Cost You
Making mistakes is just a part of the process. Learn to expect that you will falter from time to time. It’s how you recover from your mistakes that really counts.
You’ll really save yourself time and money if you learn from your mistakes the first time around. You’ll be even further ahead of the game if you can learn from the mistakes of others.Â I’ve made plenty of blunders myself and if you really want to learn what not to do then go here and read about my million-dollar mistake.
The trick is not to avoid making mistakes but to avoid making the same mistakes. The faster you get up from failure and alter your course the more successful your business will become.
Not Taking the Right Risks
The very nature of business requires that you must take a risk. Playing it safe limits how far you can go. It’s necessary to raise the ceiling of your own standards in order to expand and grow your business.
Perhaps this means that you must switch to a new business model or plan to move your company elsewhere. Whatever this looks like for you, it’s important not to let fear hold you back.Â Ultimately there is even a risk in staying stagnant as business opportunities may fall through your fingers.
Sometimes you must feel the fear and do it anyways.
First Business and Not Learning
You must learn to defy the odds. Looking at success rates can only serve to discourage you in your new business.Â What you must keep in mind is that your success is directly related to the amount of effort you are willing to put forth. The statistics reflect that 78% of new businesses encounter unsurmountable obstacles. This only amounts to evidence that your business will be in the remaining 22% if you really focus your energy strategically and creatively.
Second business ventures hold a slightly higher average but business requires hard work and dedication and this must continually be your focus when taking on any new endeavor.
Not Focusing on Bottom-Line
Nothing succeeds like success. You may have heard this saying before at one point. Look towards what you are hoping to achieve in order to steer you in the right direction.
Google, Amazon, Microsoft, Skype and 37Signals are all shining examples of companies that acquired amazing success. Seek to emulate their accomplishments if you hope to walk in their footsteps.
Focus and excellence in one specific area are common to all of the above companies. Mastering and dominating one market became their signature to success. Mediocrity over many domains will get you by but specialization in one area can really drive you to a whole new level.
Your own unique path will present itself to you one step at a time.Â There are no guarantees in life and this applies to business as well. The road can be rocky at times and sometimes you’ll want to stop all together.
However, if you persevere through the rough patches and avoid the above pitfalls you’ll steer a course to the wildest and most satisfying experience of your life.
Let’s help guide each other through the rough patches of entrepreneurship. Please share below any obstacles that you have overcome along your business journey. The more we learn the easier the road becomes for all!