When I’m not helping start-up businesses, I’m often asked to work with established businesses that are either stalled or struggling - Their brilliant ideas that became their business and livelihood now look like a noose around their neck. Just like the Dementors from the Harry Potter books, their business is rapidly sucking the lifeforce from their body.
Once the initial euphoria and enthusiasm of the new venture starts to wear off, and the reality of the effort required to both maintain regular income and manage all the business tasks sets in, it can be an emotional and challenging time. It’s perhaps not surprising that so many businesses fail within the first few years. When you start a business you “are” the business. You do everything and that seems OK at the time as you feel the long hours of effort are directly providing an income. You can fall into the trap of dealing with your business “day-to-day” without any real consideration for “tomorrow” and your long-term goals.
Then “stuff” happens that knocks you for six; your favourite customer suddenly goes elsewhere, your awesome staff member hands in their resignation, a new competitor opens up down the street, your cash in the bank starts to look a little low and the bills are coming - “Pop!” the bubble bursts. This is the watershed moment: Plough-on or pack-up?
Business can be hard. Even if you have previously been a manager in someone else’s company, running your own business is an entirely different matter. It can easily become overwhelming. Simply being good in your chosen field is no longer enough to keep the wheels on the wagon.
So, let’s stop the clock, rewind, and consider what we can do differently to be better prepared and more resilient for the inevitable challenging times ahead. The most common themes I find when working with new clients in distress are:
· Understanding cash - Future sales orders will not pay the bills today, only cash in the bank matters. You need to establish and actively maintain credit control processes.
· Promotion – Unless you invest in advertising and marketing you won’t get new work once you have finished selling to your friends and family. Spending money (and time) promoting your business is essential. It is adding value and not an optional expense to be avoided.
· Focus - Know your market and stop trying to be all things to all people. Analyse your market and sales history. Focus on the best opportunities; not all business is good business. Be prepared to say farewell to some clients if they don’t fit into the future. Some clients may need to be actively “exited” if they are in the “Dementor” category of high-pain for little-gain.
· End game – Know what you ultimately want to achieve from your business and then plot a course to reach that goal. What you do today is just part of that journey – what else needs to be done?
Hindsight is a wonderful thing … and it’s also exactly the value of working alongside an experienced business coach. A coach can help you better anticipate and plan for the risks to your business. They can also help you find the golden opportunities too.
Get in touch if you’d like to chat about the state of your wagon!
NCBIZ provides specialist support and coaching to help start-ups and businesses across Christchurch and Canterbury establish a solid foundation, overcome challenges and perform at their best.