But I Did Everything Right by BOSS Aundrea Wilcox
Over the holiday break, I took the opportunity to catch up on some long overdue reading. Although there were at least a couple of news stories related to business closures that I read which left an enduring mark, for the purposes of this blog post, I will discuss the article called “5 Businesses That Failed to Survive Trials of 2011,” which appeared in the nationally-recognized New York Times.
From my perspective, there were six very important takeaways and common themes that are applicable to the novice as well as experienced business owner:
1) Nothing is off the record when you are speaking to the media, so THINK before you speak. If you’re not careful, your harsh words may haunt you well beyond your years in business. Resist the urge to tell the reporter that you did everything right. Don’t get caught up in playing the victim, as you may feel like you have all the power when you are talking and the reporter is hastily scribbling down every word that tumbles out of your mouth. Most likely, your words will be interpreted differently the next day by readers even if they are verbatim. Now, tell me who will want to do business with you in the future if you’re a blamer? And packing up and leaving town won’t help much (thanks in large part to the Internet).
2) You must take responsibility for your failures as well as your successes. Don’t blame your elderly parents, sixth grade teacher, store manager, life coach or anyone else for your unplanned and misdirected spending; short-sighted planning; under- and over-reaction to competitor moves; ineffective marketing; and because you failed to perform in functions you genuinely believed you were an expert. And don’t blame weak sales or the economy, because you’re never alone in that boat. The economy is cyclical.
3) Don’t over borrow for your startup. When your financial assumptions or projections show that you will bring in $100,000 in the first month of operation, you have to ask yourself one question: “Am I being honest with myself and the lender?” The truth is you may lose a ridiculous amount of money through no fault of your own. With that being the case, whether to borrow money should be based on financial need AND the ability to pay back the loan. Also keep in mind: “the rich rule over the poor, and the borrower is slave to the lender" (Proverbs 22:7). Whether you’re religious or not, this is only logical. When you are using other people’s money (including a silent partner), you give up control.
4) Marketing is more than a one-shot wonder. Let’s face it, you’re not going to stay in business because you recently won a contest, appeared on a television show (unless it was Oprah), or your business was featured in a magazine. You have to keep the pressure on and keep doing that wonderful marketing stuff. Quite the opposite, a one-shot marketing wonder should be treated as only a launch pad for achieving bigger and better things.
5) Deals fall apart. Certainly don’t put all of your eggs in one basket. Diversify your revenue streams as much as possible. If you are a restaurant and you are counting on a large local company to do thousands of dollars a month with you in catering, don’t sit back and expect that you will have that business tied up forever. Likewise, if you don’t have the business already, don’t go about running your business today as if something is owed to you simply because you’re a local small business. Unfortunately, things change, people change, and key people leave key positions in big companies. Big companies close their doors unexpectedly (to the public) too, so you should always be working on a back-up plan.
6) Expanding something that is inefficient will generally lose money and only make things worse. Just because sales are growing, doesn’t mean that it’s time to expand your business, i.e., taking on new expensive projects, creating new franchising opportunities, and relocating to a larger more upscale space. Remember, it also takes money to grow; if you don’t have access to the capital you will need—and the ability to pay it back if the bank calls your loan early—now may not be the right time. Too often, small business owners sign leases and contracts out of sheer excitement and overzealousness—before assessing risks and taking necessary precautions.
The five businesses discussed in the article could have been located anywhere across the country, and even right in your backyard. At the end of the day, successful people want to associate with and help other successful people, so plan for your success and think and act like a success. Appreciate your mistakes and move on without blaming others and you will go much further down the path to financial freedom.
Learn more about Aundrea Wilcox at startupsavvy.biz
From my perspective, there were six very important takeaways and common themes that are applicable to the novice as well as experienced business owner:
1) Nothing is off the record when you are speaking to the media, so THINK before you speak. If you’re not careful, your harsh words may haunt you well beyond your years in business. Resist the urge to tell the reporter that you did everything right. Don’t get caught up in playing the victim, as you may feel like you have all the power when you are talking and the reporter is hastily scribbling down every word that tumbles out of your mouth. Most likely, your words will be interpreted differently the next day by readers even if they are verbatim. Now, tell me who will want to do business with you in the future if you’re a blamer? And packing up and leaving town won’t help much (thanks in large part to the Internet).
2) You must take responsibility for your failures as well as your successes. Don’t blame your elderly parents, sixth grade teacher, store manager, life coach or anyone else for your unplanned and misdirected spending; short-sighted planning; under- and over-reaction to competitor moves; ineffective marketing; and because you failed to perform in functions you genuinely believed you were an expert. And don’t blame weak sales or the economy, because you’re never alone in that boat. The economy is cyclical.
3) Don’t over borrow for your startup. When your financial assumptions or projections show that you will bring in $100,000 in the first month of operation, you have to ask yourself one question: “Am I being honest with myself and the lender?” The truth is you may lose a ridiculous amount of money through no fault of your own. With that being the case, whether to borrow money should be based on financial need AND the ability to pay back the loan. Also keep in mind: “the rich rule over the poor, and the borrower is slave to the lender" (Proverbs 22:7). Whether you’re religious or not, this is only logical. When you are using other people’s money (including a silent partner), you give up control.
4) Marketing is more than a one-shot wonder. Let’s face it, you’re not going to stay in business because you recently won a contest, appeared on a television show (unless it was Oprah), or your business was featured in a magazine. You have to keep the pressure on and keep doing that wonderful marketing stuff. Quite the opposite, a one-shot marketing wonder should be treated as only a launch pad for achieving bigger and better things.
5) Deals fall apart. Certainly don’t put all of your eggs in one basket. Diversify your revenue streams as much as possible. If you are a restaurant and you are counting on a large local company to do thousands of dollars a month with you in catering, don’t sit back and expect that you will have that business tied up forever. Likewise, if you don’t have the business already, don’t go about running your business today as if something is owed to you simply because you’re a local small business. Unfortunately, things change, people change, and key people leave key positions in big companies. Big companies close their doors unexpectedly (to the public) too, so you should always be working on a back-up plan.
6) Expanding something that is inefficient will generally lose money and only make things worse. Just because sales are growing, doesn’t mean that it’s time to expand your business, i.e., taking on new expensive projects, creating new franchising opportunities, and relocating to a larger more upscale space. Remember, it also takes money to grow; if you don’t have access to the capital you will need—and the ability to pay it back if the bank calls your loan early—now may not be the right time. Too often, small business owners sign leases and contracts out of sheer excitement and overzealousness—before assessing risks and taking necessary precautions.
The five businesses discussed in the article could have been located anywhere across the country, and even right in your backyard. At the end of the day, successful people want to associate with and help other successful people, so plan for your success and think and act like a success. Appreciate your mistakes and move on without blaming others and you will go much further down the path to financial freedom.
Learn more about Aundrea Wilcox at startupsavvy.biz
Aundrea, these is a great compilation of dos and don'ts for small business gleaned from your reading. Another point to be made is that even a business failure is a success ... if the owner learned from his/her mistakes and is able to apply those lessons to a new business venture or career opportunity.
ReplyDeleteYes, this is an excellent point, Liz.
ReplyDelete