Why so many businesses don’t grow

Lots of people have great ideas for businesses.

Lots of people start new businesses.

Not many grow them into thriving enterprises that provide employment and contribute significantly to the economy of the country.

Too many people spend all their time working IN their business and hardly any time at all working ON it.

There’s nothing wrong with “lifestyle” businesses if that’s what you set out to achieve but so many people set out with different aims: to build a business that can exist without them; that can be sold; that won’t die when they retire; that will provide them with a pension; that provides other people with a good living; that is more than simply swapping their time for money.

A good idea is not enough to grow a great company.

Being great at what you do does not mean that you have a great company.

Companies consist of three main things:

Product                   +      Process     +     People

Many businesses have a good product and great people but it’s the processes that allow them to grow.

This means that any job does not rely on just one person being able to do it.

Invest as much in the processes as you do in the product and the people.

Under funding is what keeps most businesses small.

Too many new businesses think they have to compete on price in order to get into the market. This is only true if everything else you have to offer is unremarkable and will only work if your whole business model is based on very small margins.

Keeping control of cash flow and understanding management accounts is probably THE most important factor in growing a business.

Money allows you to take the right business decisions at the right time but often the biggest decision that needs to be made isn’t a financial one but “Are you the right person to run your business?” Just because you started it doesn’t mean you have the right skills or temperament to do the day to day work of managing it.

If your aim is to grow a business rather than create a job for yourself, assuming that you already have a great idea,  these are the top tips to make it work:

1. Get enough capital before you start. Working just to cover your own wages is not a business.
2. Estimate what you need and how long it will take to turn a profit and then double it.
3. Don’t do any job that you can hire someone else to do better or quicker.
4. Understand the finances of how a business works. It’s the most important job.
5. Invest in processes so that no one person is irreplaceable – especially you.

Share below your experiences of growing a business – I’d love to hear them ….

Image from www.bigtomatocompany.com

Oh dear, poor you. You’re having a hard time, your business isn’t going well and life is so unfair and you have a lot to deal with.

This sympathy is free, there’s no obligation to return it and it’s offered in all sincerity. I’d offer you some tea to go with it but I can see you’ve already had lots.

Now, how do you feel? Understood and supported? Good.

But here you are still feeling bad and I can see that every time someone asks you how things are you feel that pain all over again. Could it be that the more you focus on your difficulties the worse you make yourself feel?

Anyway, that’s more than enough sympathy now. What you need is some encouragement.

Your business doesn’t have any emotions. It responds to action. Take the right actions and your business will flourish. Expect it to sit and wait for you to ‘feel like’ taking action and it won’t.

If fear has you in its frozen grip, sympathy won’t get you out of it. Even the tea won’t melt it. Only action has any effect.

If you can’t think straight, DO something.

Consistent action, doing the right things at the right time, is what gets us what we want but until you figure out the right things to do, do something anyway. Action has a 50% chance of getting the right result. Inaction has none.

I’m sorry you’re feeling bad. Really I am but what are you DOING to change things?