If you’ve been in business for more than 5 years, you may be jaded about the success of the new startup businesses around you. After all, over the past 5 years, almost all of them went out of business. You’ve become a little jaded. You don’t want to get too involved with a company that won’t exist next year, so you don’t bother.
Most blogs and advice givers claim the reason that businesses go under is lack of capital. In our experience, not having capital is a symptom and not a cause. Rather, these businesses would go under anyway because of the way they are run. Here are 7 tell tale signs your business will fail and what you can do about it.
#1: You Don’t Treat it Like a Business
For some strange reason, there seems to be an emerging distorted version of the “American Dream” of business ownership where you’re now the boss and can spend your Friday afternoon drinking pina coladas at the beach. Or maybe that you can always take extended lunches and play video games all day at your desk.
The reality is that you’re not going to make any money playing video games at your desk or drinking pina coladas. There’s a reason your job didn’t allow you to do those things. Instead, set office hours and work toward your business during every minute.
#2: You Don’t Know How to Get Customers
If you build it, your customers may not come. You’ll just go out of business. This is a promise.
You need to find customer acquisition channels and find more of them. You need to keep working until you find the most cost effective way to constantly get customers. At the Triassic Media Group, we maintain 16 active customer acquisition channels that range in cost between $1.25 to $200 per customer acquisition. We’re always looking for ways to get better about this.
We also firmly believe in companies investing in content marketing services and a well-written website. Without the website or content, how are people going to know that you’re legit?
If your company needs help with developing content for marketing or you have other content needs, then Triassic Media Group is the partner that you need. Don’t have a website yet, we can fix that for you too.
#3: You Don’t Spend Enough Hours on Your Business
For some reason, most startup companies I’ve seen go one of two ways:
- They’re the cliché company where workers put in 60+ hour weeks for a measly portion of equity.
- They spend a few hours a day (or week!) in the office and don’t know how to spend their days. They’re really proud of their new business, but they hardly spend any time on it.
If you’ve started a business, please don’t plan on extended vacations, baby making or leisure time for the next two years. Focus on your business, really dedicate the time and energy on it to make it work. If you’re in the office, even if you don’t have client projects, find work to do. In a business younger than 2 years, there is always work to do. Write enough blog posts for the next 12 months, schedule out social media advertisements for 30 days or develop a comprehensive brochure for your favorite service.
If you need an idea of what your new business should be working on when not working on client projects, check out our post “100 Things You Should Be Doing For Your New Startup Business Now.” That should keep you productive for quite a while.
#4: You Don’t Have Systems in Place
At your last corporate job, there were tons of systems. Think about it! You likely had at least one “system” for payroll. You knew how to request time off. You knew the systems for how you did your job. Maybe you had an email system in place.
Figure out all of your company’s processes from customer acquisition and service delivery to hiring and training staff. Develop the systems and processes behind each aspect of your business and write them down.
One system we think every business needs is a way to track performance. We want to know how many projects we complete, what they cost versus what they earn and what client feedback we got. Without any of this information, we wouldn’t know if we were on target or not.
#5: You Don’t Commit to Learning About Business
Nobody naturally knows how to run a business. This is not an inherited trait. There are reasons why people like Steve Jobs and Abraham Lincoln loved to read.
Find every single free resource that you can find. There are plenty of resources for free business counseling, classes or books. Read all of the blogs. Pay for classes. Whatever it is, make business your craft and always learn how to be better. If you take anything from this post seriously, make it this one.
One easy way you can improve your business is to watch ABC’s Shark Tank. The premise of the show is that businesses meet with investors to fund their businesses. This is interesting, sure, but what’s really going to help you is to listen to the investor questions. Any time that an investor asks a question, ask that question for your business. Some of the questions that you should be asking include:
- What’s your cost of client acquisition?
- What’s your profit margin?
- What’s your cost of service?
If at any time you don’t know the answer to one of these questions about your own business, write the question down and figure it out. Your business will thank you.
#6: You Don’t Meet Client Deadlines or Communicate
As a writing and editing company, we outsource random tasks to other companies all the time. Our management team invested significant time and resources into understanding the unique strengths of our staff. Anything that is time consuming and can be done better by someone outside of the company can immediately be outsourced. For example, we outsource graphic design to extremely talented people all of the time.
However, you’d be shocked how many people don’t meet our established deadlines or communicate with us. We usually stop working with these people. As a business-focused management team, we work very hard to make our business successful. While working with outsourcing teams allows us to improve the quality of our services, there is no reason for use to work with anyone that jeopardizes our relationships with clients. Missing deadlines is the fastest way to ruin a relationship with a client. So, if an outsourced team cannot deliver on time, we cut that risk out of our business immediately.
#7: You Don’t Ask the Right Questions
My wedding florist probably thought I was the most annoying person ever. She ran her business out of her home. I asked her so many questions when I was there, just to know how it functioned. Aim to figure out how other businesses function regularly. Ask the right questions and don’t be scared to offend people. I find the most successful people only want to help.
Also, if your client leaves you, ask them why. For our company, price is sometimes an issue. They’ll opt to try to do it themselves to save money. Usually they come back to us, but price isn’t something we can really change and keep the same level of care. However, if they said something else, that’s really good to know. We might be able to improve upon that in the future.
At the Triassic Media Group, we’re committed to the long-term success of our clients. We want you to succeed. Please call us directly at 813-58-MEDIA to talk about how our services can help you succeed.