Previously I posted Business Killers Part 1 and 2, and discussed such challenges as not staying on top of accounts receivable, falling behind on paying the bills, persistent low-bidding, and getting buried in debt. Here are four more business killers.
Lousy Customer Service. While most business owners are motivated to provide excellent customer service, problems creep into the workplace when the business starts to grow, requiring that the owner take on hired help. It should be the goal of every business to provide top-notch customer service for every person that comes through the door. No small business can afford to have employees chasing away customers. Owners need to provide training for employees and monitor customer service ongoing.
Financial Illiteracy. There are five financial reports that are critical to managing a business: the balance sheet, the income statement, the aging accounts payable, the aging accounts receivable, and the cash flow forecast. Too often, business owners who get into trouble don’t even know they’re insolvent until they’re turning the keys over to the landlord. It’s not enough to get financial reports and pop them into a file folder—you need to get them shortly after the end of each month and you must learn to read them and use the information to make business decisions. In order to be able to calculate prices and put together bids, owners need to know the cost of producing products and services, as well as the true cost of making sales.
Fumbling the Hurdles of Growth. Business start-up requires a certain set of skills, but owners who get through that early scramble are in for an even bigger challenge—expansion. Growth blows the doors off the micro-business model and invokes different threats, demanding a whole new set of skills. The path to growing a business from zero to several employees never seems straight or clear. It’s always cluttered with difficulties that exact critical decisions along the way, many of which can propel you forward or flat backward, depending on the quality of each decision. The keys to growing a business are: a clear vision, courage, passion, perseverance, a dash of good luck, and the ability to make more good decisions than bad.
Burnout. It’s fun and exhilarating to get caught up in a new business. The realization that you can build an enterprise and achieve financial and other dreams, the ability to chart your own path and sustain your family without having to punch a time clock or report in to a boss every day, the thrill of working at something you love to do—these are all wonderful things. But for some entrepreneurs, the real enemy is the inability to shut the business off. Working for others, you usually have welcome restrictions on the amount of time you can work—weekends, holidays, regular work hours—those restrictions all go out the window once you’re self-employed. When burnout overtakes a person, it usually comes at a high cost: unable to enjoy the work, too tired for leisure or family time, health issues, and limited energy to serve customers. The best time to battle burnout is before it happens. Set your work and personal boundaries early, exercise regularly, eat healthy foods, and take time each day for your family, friends and you.
Stay tuned for Business Killers Part 4 where I will cover such business killers as the cash flow crunch, fingers in too many pies, trying to be all things to all people, and knowing when to fold ‘em.
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