Earlier this week I was visited by an uncle of mine from Melbourne. He is a highly successful businessman and runs a large business in Fiji and Melbourne. We began discussing business over coffee.
Generally, I get asked questions like what makes a successful business and the traits of successful entrepreneurs but my uncle asked me a different question. In theory, the answer should have been easy. One would expect it to be opposite of success but it wasn’t quite like that.
I had a think about it a while. So what was the question I hear you ask?
Well it went something like this. "There is almost an abundant amount of information about what makes a successful business. However most business are not successful. How can that be?" We all seem to do the opposite of what we are supposed to do. Maybe we are attacking it the wrong way. Maybe we should be asking what do you have to do to ensure your business fails and then do the opposite of that.
All of a sudden I had my pen out and we came out with a list that will almost guarantee to make your business fail. So let me get the warning out first – the following can seriously damage your business. Only read if you are willing to do the opposite!
1. The business owner never takes "time out"
I have been advising businesses for over 15 years. I have seen workaholics (I was one myself). I have found that hard work does not always result in more money. You see we are programmed to believe that we have to work hard or that "business is hard."
My experience with successful business people is that yes, they work hard and are passionate about what they do but when they need time out -- they take it. Holidays and R&R is a must. Work Life balance is a big thing for me and I have found that some of my best ideas have come about when I am nowhere near my business.
Ironically I have also found that those that work longer than 50 hours a week are less effective and less successful. More importantly, it is not sustainable and there will come a time when you hate the business and effective sabotage it for you to get your life back.
2. It’s about making money stupid
It sounds obvious that we are in it to make money but sometimes I am not so sure. Often I see unnecessary expenditure justified on the basis that it is ‘tax deductible, isn’t it’
To make more money you need to maximise income and minimise expenses. Period.
The business owner often becomes so preoccupied with minimising tax that they start treading in "grey areas." If you insist on showing the least amount of income, your brain will always be concerned about keeping profit low and guess what, your brain actually helps you keep your profits low. This is exactly the opposite of what you want to do. The better objective might be "What do I do to increase my sales?" After all, what is better - 70% of $100,000 or 70% of $200,000? Yes, your tax bill is higher but you walk home with more money too.
3. Keep doing the same things
A business that does not change will eventually die no matter what business or industry you are in. Take bookkeeping for example. This is an industry that has hardly changed in decades. However, technology is revolutionising the industry. Customers want more clarity, more reports, and fixed fees. A lot of bookkeepers seem to be ignoring this at their peril and they will eventually lose out to more aggressive bookkeeping firms.
4. You are the best – so you do everything yourself
I hear this all the time. "Instead of giving it to someone else, I might as well do it myself. At least I know it has been done properly." Problem is the more you do, the more you get sucked in the business and all of a sudden you are doing item 1 above and cannot take time out because your business is totally and utterly dependent on you.
This will almost guarantee your business will fail when you are not in the business. Just think about it. What would happen to your business if you could not turn up to work or could not call a customer or suppler for two weeks? If your answer is the business would suffer, then you need to start trusting other people.
5. Assume you do not need to sell
Many business spend a lot of money and time setting up a brand, website and fancy looking brochures and just assume customers are going to walk through the door. That rarely happens even in a retail environment.
There seems to be a fear about selling, but if you want to be successful you need to learn how to sell yourself and your business. The problem is we were never taught to sell and selling has a bad name. It does not have to be that way.
Take a sales course, learn how to negotiate and make your business as successful as it should be.