Obstacles That Kill Businesses
Every business runs into obstacles. The list at times can feel like its endless. The key, is not that they will occur, but in how they deal with them, and what they do to overcome. It is this that will determine whether you trip and fall, or overcome them unscathed.
To help you, we have put together proven strategies that will help you tackle them successfully.
Many obstacles can be avoided.
Finding the right people for your company is one of the hardest, and the most important. The wrong people drain your time and resources, as well as been divisive to your team. Conversely the right team not only sets a company up for success, its the engine that drives it forward. Don’t let this be an obstacle to your success.
Listen to your gut, or seek wise counsel. And above all don’t rush. The adage ‘slow to hire, but quick to fire” can serve you very well.
Research has clearly shown that uncontrolled costs or “Living too high for the business” is another cause for failure. .
We’ve seen it too many times. A startup that gets some funding and begins to spend like a Fortune 500 company. The thrill of the win replaces common sense. Microsoft used to tell its employees to think as if they were “the biggest small company in the world.” This small frugal mentality is great advice, regardless of any companies size.
Entrepreneurs and early stage companies often struggle with having the right pricing strategies for their products and services. Emotions often dictate the price instead of a clear calculated cost and sales methodology. For example, the fear that you will lose the sale and start charging too little, thereby continually lowering your profit margin. This can create insurmountable obstacles down the road.
Another example is pride in winning at all costs: which results in obtaining the deal or contract by the lowest bid, and feeling good that you beat the competition. This in most cases is a hollow win.
Pricing must be made with your head. Careful evaluation of your costs, with standard prices, and a disciplined approach to pricing will keep you grounded. Certainly you are to be aware of market forces, competitors and your perception in the market place. Evaluate your successes and failures rationally, and periodically review your prices.
Talk to your clients. Why did you win? What was the main reason? Often you will find it was not price in the final evaluation.
Let it go
Companies generally believe that if they have an idea – then its brilliant and every one should buy or use it. Simply this is not true. One of the quickest ways to sabotage a business is to stretch to far and to provide too many services or products. Often they wont work. Some simple questions:
- What research and market analysis has been performed?
- What will it take to support the new service? What are the expected costs of the service?
- How close do they align with the core business model?
- What is the profit margins?
These questions need to be asked before any new service is launched. Then continually asked every three months until the new service or product is growing according to plan. If not then learn to ‘let it go!’
It’s almost as if we develop blinders that prevent us from seeing what is very clear to outsiders, but not to us. Evaluate what doesn’t work and have the courage to walk away from it before it becomes a major obstacle. The energy you will have released from letting it go will increase your concentration on what works—it will allow you to apply the intensity of a laser focus on the right target.
Strategies are not static
Times change. While business principles remain static, a successful business must be fluid in their approach. Too often ingrained habits or a companies approach cling to models and strategies that have not been reevaluated in a long time. They themselves become obstacles.
However often the approach is to throw out the old and bring in the new, and companies also wonder why these new ideas don’t work. Streamlining, brainstorming, careful evaluation are critical and every approach and style needs to be examined, with regular reviews.
Know the ‘Suez Canal’ in your business
For over two millennia national leaders knew that if they could cut through the Arabian peninsula, and avoid the treacherous ‘Cape of Good Hope’ at the southern tip of Africa, time, lives, ships and goods would be saved, not too mention the increase in revenues from this endeavor.
In your business how would you eliminate one big obstacle that once removed would enable you to grow exponentially? What would your answer be?
The first step is to understand the obstacle. This enables you to begin the process of address the problem and working through the steps to remove it.
Never lose sight of Sales
During the startup phase, entrepreneurs generally act as sales chiefs. They know their product or service best because they created it. As they grow and start to hire staff, some founders may remove themselves from the sales function. They slowly start to distance themselves as they focus on financing, people management and other operational issues. They may end up losing their grip on what matters most: sales. As we all know, sales can make or break a business.
The latest research shows that 55 percent of managers, for example, are too busy to train or develop their sales team. Yet numerous other studies, across a range of industries, clearly demonstrate that there is a direct and consistent correlation between the caliber of the sales force and organizational growth. Good sales make good companies. Great sales make great companies.
Common advice usually given to entrepreneurs is not to wear too many hats, not to micromanage the business. While this is true, when it comes to sales, it is very important to firmly keep sales in focus. Without sales a company will falter!
Stick to your knitting
Stay focused on what you know, and what you do best. In other words, stick to the knitting.
Be wary of business diversity. Developing multiple revenue streams are very important, but they must be complimentary to the core business.
There will always be challenges and obstacles to any business and at any stage. It’s how you deal with them is the measure that will prove wether you stand or fall.