My client hesitated; "I don’t know about that. What if a better opportunity comes along?" I was suggesting to him that he commit to a specific objective; time based, measurable, with steps to follow once the initial objective had been achieved. It was designed to get his start-up moving, to get some momentum, and bring in some cash.
But he was like a dog with too many bones to choose from. He’d identified so many opportunities and markets for his product. But virtually all had impediments, most of which required money to overcome, money he didn’t have.
Have you ever watched a hare running in a paddock? They can run quite quickly, but don’t make much forward progress. Off they dash, then stop, squat for a moment, off they go again, in a different direction, only to stop, squat, and off again – in another different direction. There’s no such thing as a straight line from A to B.
A poorly led business is like a hare in a paddock, constantly changing direction. It is very hard to make progress when you are changing direction all the time. Different goals, different strategies, not giving time for one to succeed before the next is embarked on confuse both staff and customers. Chasing another bone, the silver bullet that is going to solve the business’s problems for once and for all.
Successful businesses have a very clear focus on where they are going and what must be done to achieve their goals. They also have motivated staff.
That doesn’t mean something should not be abandoned if it is not working. Not everything will work. You have to keep testing and trying, but do so with your eyes clearly fixed on the end-goal.
There are two problems with hare-like behaviour in a business; lack pf progress, and stress.
Successful businesses keep trying new things. And importantly they keep measuring, so they know what is working, and what is not working. When they find something that works, that takes them towards their overall objective, they do more of it. But when they find something that doesn’t appear to work, they may try to fix it, and if it doesn’t, they discontinue that project or process.
The important thing is to keep moving forward to achieving their overall objective.
Two key measurements of that progress will be cash flow and profitability. If you are dashing about from one thing to the next, not committing to anything because you want to be free to chase the next meaty bone, then you will be spending precious cash in the endeavour to make this one work, but not staying long enough to make it work, and generate cash flow.
Believe me, this happens, particularly in the start-up phase. And the problem is, such businesses never get beyond start-up. They dart from one possible windfall, to the next, off in another direction.
If your business is not making progress, if it is burning cash faster than it can create it, then you will be stressed, and that stress will spread throughout your business. Your staff will know things aren’t going well, and they will be worried about their jobs, and their future.
Stressed people aren’t always pleasant to be around.
And I know what your solution will be, having been working with people like you for twenty-eight years.
The solution most adopt is to work harder and longer. Gradually you find yourself working long days, and night, seven days a week. No time for your family, and your hobbies for relaxation.
It does happen. I’ve seen it time and again.
I know it sounds boring but, put the blinkers on, decide which of the options has the least impediments to success, plan the steps, and take them, one at a time.
Achieve that, and move on to the next.
Develop some momentum, and bring in some cash to fund those next steps. Slow and steady progress will be the result.
My client is still hesitating. Setting targets and dates is a bit to airy-fairy. But not that new opportunity he has just identified – it’s huge. And he can’t wait to attack it, if he could only fund that attack.
When clients approach me for coaching, clients with businesses that are underperforming despite the crippling hours and effort the owner is putting into them, it is not just marketing that is holding them back. It is the lack of control they have over their business, and eight times out of ten that lack of control comes down to a lack of knowledge of what is happening in the business, and lack of direction.
For more than 28 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand:
• The strengths, weaknesses opportunities and threats of their business
• Determine where they want to be – clear, achievable goals, and
• How they are going to get there – their strategies to achieve their goals
This is sometimes known as the NOW – WHERE – HOW model.
If you would like to discuss with me how you might do that, book a Strategy Consult here.
© Copyright 2016 Adam Gordon, The Profits Leak Detective
Some profit losses are pretty obvious - so you fix them.
BUT, what if you don't know profits are leaking, cash out the door?
Possible leaks could be anywhere.
Are there some clues or symptoms that are tell-tales?