The seeds of business failure are generally sown many months, and sometimes years, before that final crisis pushes the business over the edge into liquidation or forces closure. The latest COVID-19 lockdown has been that final crisis that has pushed many businesses over the edge.
The signs that things are not what they should be are often obvious:
- Cash Flow shortages
- Sales have levelled out or are falling
- A competitor is taking away your best staff (usually sales personnel)
- Expensive capital equipment is underutilised
- There is insufficient financial resource to replace aging/worn-out equipment.
Both research and our experience have shown that internal misjudgements are six times more likely to cause business failure than external factors. The message is clear … keep objective help close at hand and if you do not have it, get it without delay.
This blog post has been designed as the first of many specifically designed to highlight the necessary techniques, lessons, strategies and survival tactics so necessary to stay alive in the continuous battles raging every day in the realities of today’s business world.
Humanity has developed to the level it has reached today through an exceptionally long process of trial and error. Many cleansing periods have taken place throughout human history, with millions of people having been wiped out in each event. Just imagine how much knowledge was lost! Fortunately, many important lessons and messages survived these cataclysmic events and were passed on to later generations.
Is there any difference in the business world? No. Many people have run businesses and many of them have failed (statistics run at a survival rate of 1 in 10) for a variety of reasons. Valuable lessons are lost to the current, and future, generations with each business death. These lessons were all learnt the hard way and cost an unbelievable amount of money in the process. One would think that we have, somewhere, a reference book called ‘The Book of Hard Knocks’ where we can access all these invaluable lessons. Unfortunately, this book does not exist, and if it did, it would not be a single book, but a library of books. We will bring many of these lessons to you!
Do not fool yourself in thinking that this is what Universities are for – to teach us how to prevent business failure. Universities are run by academics who take instruction from government and from large Corporations regarding what they teach you and our children about business (if anything at all). Although they are often great thinkers, these people are not business smart!
Forty years ago, the Bank Manager was a highly respected member of the community. If you had an account at his branch, he would contact you at least once a month and arrange to come and have a cup of coffee, with you. When he came to see you, the discussions centred on business – your business as well as what was going on in the community. He was a business deal matchmaker, a business mentor, a business advisor – he was a business friend as well as a disciplinarian, but the point was that he had your business interests at heart. He was highly esteemed in the community because he had vast business exposure and experience. He was a knowledgeable man who had ‘seen it all’ – and you valued his input!
Where is this man today? Unfortunately, he is either dead or has been thrown onto that knowledge scrap heap called retirement. He has no protégé because the banks have changed their approach to doing business with us, their clients. His place has been taken over by call centres, bits, and bytes.
So where does the business owner go today for business advice? Week by week DLGA will bring you another lesson, another principle or another business fundamental learnt from real, practical, and tangible history and often some are still practiced today in the tiny recesses of successful businesses. Being involved with senior business owners, and past owners, we will bring you the lessons that we have learnt fighting in the realities of business.
If we may make a couple of suggestions:
- To receive these messages, you will need to register as a subscriber (at no charge) as the anti-spam practices dictate the need to do so. Under no circumstances will your address be sold, traded, or otherwise abused by us – that is a solemn promise. Here is a VERY sound business principle:
‘Never do business with someone you can not trust’
- Share these messages with other business owners by forwarding them to those select few who value knowledge and experience, and who believe they can learn from those who ‘have been there and done that’.
- Reference and file each letter. It is always beneficial to refer back. In addition, keeping these messages will save you of time and money because those who subscribe in months to come will have to pay for the knowledge, we are giving to you.
There is, of course, some knowledge that we will not share with you, but this knowledge falls within one of three dangerous playing fields:
- Illegal practices
- Tax evasion
- High risk practices or interpretations of knowledge
It is extremely difficult to tell you what to expect from your association with us. Everyone gets something different – but you will get SOMETHING! Expect nothing and you will receive a bounty.
We will:
- Provide an on-going process of learning on key business fundamentals
- Tell you interesting stories – some beautiful – some horror
- Give you the opportunity to share your business lessons with others
- Tell you who is out to mess you around
- Tell you what to watch out for
- Share various things you should, and should not be doing
… the list goes on.
Our purpose is not to entertain you! You may not enjoy every communiqué as we may impart information that will strike a very deep and hurtful chord. If this is the case maybe you should ask yourself how many times you have had to visit the same problem before you were, and are, able to learn the lesson you need to learn.
‘The definition of insanity is: Doing the same thing repeatedly but expecting a different outcome.’
Much of what we will be sharing with you may be knowledge you instinctively have and may well be practicing. Our message will merely be reinforcement in that case. If the message is new to you, or something just clicked into place because of the message, you will have learnt something valuable. If we can play just a small part in your future success, we will have achieved our objective.
We will make only one promise:
Our journey together will be one of diverse and interesting learning.
It is, after all, your actions, which will determine whether these lessons impact positively on your business. Decisions you take within the next 3 months will have a direct impact on your business profitability over the next 3 years!
Until next time, stay safe.
QUOTATION:
“A hundred years from now, it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove … but the world may be different because I was important in the life of a child.”
Unknown
COST SAVING TIP:
Success is about having good cash flow. Is there any need to have all that high-tech office equipment, fancy furniture, and extra staff? Remember, a business without all the fancy trimmings is still a viable business, but a vacant office full of equipment is an auction just waiting to happen!
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