The Business Owner Blues – How to overcome the #1 reason business owners walk awayChia-Li Chien, Ph.D., CFP®, PMP®, CPBC
Chia-Li Chien | Jun 23, 2013
What would you say is the number one reason business owners are forced to close or walk away from their businesses without much or even anything to show for their years of hard work and dedication? Cash? Funding? Competition? Expenses? Economy?
Yes, those factors are some of the answers I hear when a business owner who wants to “stop the bleeding” comes to me. But I consider those issues only underlying symptoms of one major piece that is missing.
We’ll get to that in just a moment. Because sometimes, business owners already know what I’m going to tell them. They really just want someone with experience and expertise to confirm it.
Oftentimes I begin by trying to change the owner’s focus, before I lay on the line what must be done. Some owners are focusing on nickel and diming on a contract, instead of sensibly moving on to and focusing on more profitable customers. Others are spending money on product development without knowing whether or not customers will buy the product—without a foundation of consumer research and testing that new product success requires.
Before guiding a business owner in overcoming the primary reason the business may fail, one thing is for certain—if they don’t have the vision they will never see it.
So what is the cause of all those underlying symptoms you answered with when asked, “why do businesses owners walk away with nothing?”
It’s because they do not have or have not changed their business model.
It’s understandable. When strapped for cash and trapped by low sales and even lower profits, it’s often a “can’t see the forest for the trees” situation. It’s difficult to change and be flexible. Why not keep running your business how you have for the last ten to twenty years?
Unfortunately, ignoring or not noticing your current market conditions can lead to—
• Being strapped for cash
• Failure to obtain funding
• Trying to chase the competition
• Unnecessary expenses
• The inability to ride out a down economy
Do you find it difficult to take the time needed to revise your current business model?
Many business owners do. Look at it this way. Every owner must invest in the business for it to be successful. Sometimes that investment doesn’t mean the financial kind. It means time, research, and doing what it takes to build a firm foundation that can withstand whatever the business climate throws at you. It means creating a working, flexible business model that enables your business to survive and allows you to build a financial future for yourself.
The right business model will be your road map to:
• Overcoming your competition
• Diversifying your services and products
• Getting the right people into your company.
When discussing business model changes, there are usually two different kinds of business owners—those who listen, and those who don’t. And they experience the expected results.
Those who don’t want to listen often understand the need to create or revisit their business model. They just aren’t up to the challenge. It’s too daunting. Too much to face. Others aren’t willing to make the sacrifices a new business model may require. Another segment cannot or will not make the investments (time, money, pride, reorganization, relocation) that may be required.
So what happens then? They continue to feel the pain of the pinch of cash, fail to obtain funding, fail to be able to get the banks to say yes. They cannot compete in their market. They get the business owner blues.
Those who do listen may struggle too, but they are willing to invest in their company. As a result, they will do well in the long run. They will build a foundation step-by-step now that will enable them to withstand the next economic downturn, overcome strong competitors, and establish processes, checks and balances that help determine their profit and loss and build a business platform.
The right business model means you will have a clear picture of the right—
you’ll need to ensure you will not have to walk away from your business with nothing to show for it.
For more information on how you can create the right business model for your business, contact the team at Value Growth Institute. There’s no need to live with the business owner blues!
Stay tuned for our upcoming article on what every business owner should be doing now during the economic recovery.