You’d never do anything to cause your business to fail… well, not intentionally.Find out if you’re making one of these business suicide mistakes.
Are You Killing Your Own Business?
There are many acronyms in the business world – some that really make sense and some that make you scratch your head in wonder.
Well, it is time to add one more.
This new acronyms is “S.A.D.” – This acronyms can help you determine if you or your business has risk indicators (risk factors) or characteristics that could lead to the demise of your venture.
In the end of all businesses, it is essentially the person running the company that will decide if it lives or dies. And, if it dies, when it should not have, it means you, the business owner, have committed business suicide unnecessarily. So, are you or your business at risk of business suicide?
Let’s look at these risk factors through the acronyms S.A.D:
S – Strategic Direction:
Is your business on the right path – a path that utilizes the business’s assets and resources (from capital to people) in the best possible way?
Can you or anyone else take those same set of assets and deploy them in a better way and earn more in revenue/return from them?
Far too many businesses fail these days or don’t even get out of the starting gate because they fail to plan properly or fail to change direction with their business when market conditions or changing customer preferences demand it.
Planning means understanding your customers’ needs and providing a product or service for those needs while utilizing the least amount of assets – resources are scarce after all and you don’t want to spread yours too thin on one segment or product line.
I have seen businesses that have say 50% demand yet they spend unnecessarily on 100% capacity. Its just waste. And, waste will kill your business.
A – Accounting:
Are you properly managing your business’s cash flow to ensure that your business has the wherewithal to withstand a slow period or future recession?
Does your business have the working capital to meet future customer demand?
Is your business spending cash faster than it is collecting it?
Far too many businesses fail by growing themselves broke. They have the customers yet, either through miss-management or poor collections, they don’t have the money (working capital on hand) to service those customers.
If your business can’t meet customers’ needs, your competitor will.
D – Discipline:
Are you, the business owner, doing the right things each and every day?
Daily items should include things like marketing (daily marketing) or actually listening to customers in anticipation of their needs and wants.
Or, are you taking away needed assets from the business – like drawing too large a salary, taking needed money from a cash starved business?
Know that there will be a time to plunder your own business – but, if it is growing and your plans are to grow it – this is not that time.
Far too many business owners get complacent and their business erodes over time. Or, they think that their business should pay them a huge salary from day one. While that would be nice, it is not reality.
These are indicators of businesses or business owners at risk of doing themselves in.
While not all businesses that show these risk factors will fail, it is highly likely that if your business or you, the owner, demonstrate these characteristics, you are on the path of business suicide – and that would be SAD.