Business Management Insight: 4 Easy Ways To Ruin A Business
Advice from a business management consultant
It's so difficult to maintain and grow a small business, yet so easy to go out business without owners even trying. This holds true for businesses in Denver Colorado, Boston Massachusetts, or Moscow Idaho.
Failures are not discriminatory.
Stable businesses or new startups can experience the same grim future when not managed or operated properly. Planning is a must for any business but can quickly be overshadowed when basic business fundamentals are forgotten.
Following are four easy ways for a business to lose sight of its objectives and eventually be forced to close. Doing just the opposite, of course, can help ensure business sustainability and improved profits.
(1) Forget About Customers – Just A Necessary Evil
It is amazing how many businesses don't consider customer relations in their business management strategy. Some companies treat customers not as a necessity but more as a necessary evil. Customers seem to take an inferior role both with the business and employees. Rather than being treated as the lifeline of a business, customers are instead viewed as obstacles, problems, interruptions, or inconveniences that impede business.
As a small business owner, observe businesses that are highly successful. What are they doing that others are not doing? How and why are they achieving a certain amount of success when similar businesses don't seem to be able to compete on the same level? Perhaps, one reason is how customers are treated...as if they were (and are) the lifeline of the business!
(2) Provide Inferior Products and Services – No One Will Ever Notice
While some businesses take the attitude that "cutting corners" and providing customers with inferior products and services will add a few bucks to the bottom line, customer astuteness eventually wins out. In a competitive marketplace, customers seek value in addition to satisfying needs and receiving benefits for the money they spend. A business that skimps on quality hoping that customers will never notice eventually discovers that purchasers are more skilled in knowing what they should be receiving for what they are paying.
Businesses do not compete with every business selling similar products and services, but they do compete with other businesses offering like kind of products and services. This means that luxury cars compete with other makers of luxury cars but do not necessarily compete with manufacturers of compact economy cars. Likewise, name brand fashion merchandise competes against other name brands but does not necessarily compete with low-priced merchandise normally sold in a big box retail store. Regardless of products or services sold, businesses must strive to offer the "best in its class." When inferior products or services are sold, customers notice!
(3) Employees Are Easily Replaced – Treat Them That Way
Although employees can be replaced, treating them with disrespect carries over to customers and colleagues. When bad attitudes prevail internally, they are typically projected externally, as well. If employees think they may be fired or laid off, it's difficult to have a positive attitude about a job, an employer, or worse yet customers. Without owners ever knowing (but they should), employees can “run off” business by how they interact with customers. Businesses need customers more than customers need a business; therefore, customers want an energetic, positive response when dealing with a business and its employees.
Employees are a company’s greatest assets, and they must be treated as such. They are the front line, the go-between, and representatives of a business. Employees can literally make or break a business…the difference between success and failure. It is the responsibility of employers to motivate, engage, and train employees. Each employee has certain job responsibilities and is expected to accomplish certain results, but it is the synergy of all employees working together that really drives a business forward.
(4) Run An Inefficient Operation - It’s Better Than a Job
Frequently, small business owners view ownership as simply being better than having a job and working for someone else. They do not strive to be highly successful. They just want to be successful enough to “keep the doors open.” Unfortunately with this attitude, the doors eventually close. Operating a successful business with long-term prospects for the future requires diligence and knowledge not only in one area of a business but in all aspects of business operations. When attention is not paid to the business entity as a whole, operations become inefficient rather than efficient. A successful marketing campaign as an example cannot produce outstanding results in revenue when products are not available, sales are not closed, or customers not accommodated. Likewise, a business cannot be profitable if expenses are not contained even though revenue is on target.
Operating a successful business is having all of the pieces of a puzzle fit properly together. When one department (or piece of the puzzle) is out of alignment, then every other aspect of the business equally becomes unaligned. Operating a highly efficient business should be the goal of every owner.
Summary - Turn Pitfalls Into Profits
While the four pitfalls listed can easily ruin a business, turning the pitfalls into advantages can turn losses into profits. Although doing what is most beneficial for a business is many times more difficult than taking the opposite path, it is those beneficial decisions that keep a business profitable and growing.
OnTarget Strategy is a Boulder, Colorado based business management and marketing consultancy that works with businesses in the Boulder, Denver, Fort Collins, Colorado Springs, and Western Slope regions of Colorado. We also work across the United States and Internationally with small and large organizations to help reach desired outcomes through better business management activities.