You Don’t Want to be THAT Business Owner…
It’s likely that you’ve met them before. It’s almost certain that you’ve passed by them on the street or at a chamber meeting and didn’t realize it.
I’m talking about the overwhelmed, stressed out, I-can’t-imagine-this-can-ever-get-better business owner. They have an air of quiet desperation and they are foolishly hoping for that one big deal that will magically fix all of their problems.
That stress, exhaustion and feeling of being overwhelmed are all symptoms of business growth gone badly. And…if left untreated will eventually end with the owner finding a way to exit the business and move on to something else – worn out, broke and generally worse for wear.
But here’s the surprising part – their challenges aren’t because they have a bad business. Their challenges are a direct result of the business owner not knowing how to navigate growth. When things get crazy or hectic, they just put their head down and work harder.
Unfortunately in this case, working harder is not only the wrong answer, it will actually make the problem worse. As Will Rogers once famously said:
“If you find yourself in a hole, the first thing to do is stop digging.”
When you’re THAT business owner, the problem can’t be solved by more digging – if you want different results, you have to start taking different actions…not just more of the same actions.
How to get out of the hole…
As they say, the first step to solving a problem is admitting you have one…the second step is identifying the root cause of the problem – what is driving you to work crazy hours and stress out? Here are a few likely issues – it’s possible you could have one or maybe even all of these problems:
A Broken Business Model
There’s a chance that your business is fundamentally flawed – basically this boils down to the idea that what people are willing to pay for your product or service is equal to or less than what it costs for you to deliver it. If you can’t create a believable 12 month projection for your business that includes a decent profit (on top of your salary) then you either have a demand problem (not enough buyers) or a supply problem (too costly). Either way your best move would be to dramatically change the business or get out of it completely.
Your Pricing is too low
If demand is healthy and you’re still struggling (i.e. not making money) your pricing is too low. A healthy, scalable business generates a reasonable profit on top of your salary and all other expenses. It’s time to raise your prices to make that happen…and if you can’t sell enough at the higher (healthy) prices then your business model may be broken (see point #1).
Wrong People on your team / No Leadership Team…
Let’s say you’re making some money but you are working really long hours and every significant decision has to come through you. You’re growth is capped…by you as the owner. You either don’t have the right people that can own big chunks of the business or you are unwilling or unable to let go. Either way, until you fix the problem, you’re not going to be able to successfully scale and your life will continue to be frustrating and exhausting.
No Systems in Place
Even if you have a strong business model that’s capable of good profits and a quality leadership team that truly ‘owns’ important responsibilities you’re not going to successfully scale if you don’t have solid systems and processes in place. Without systems, every day is a new adventure and you will be running into repeated problems and issues that get worse with additional volume. Eventually those problems will bury you…
You can break free…but it’s not easy
The good news is that almost all of these issues can be fixed (the exception is if you have a product or service that people aren’t willing to pay for…then you’re out of luck).
- Raising prices is a bit of an art and a science, but it can be done and should be reviewed every year or two
- You also need to figure out what a reasonable profit is for your business and find a way to make that profit all the time
- Look at where you spend your time and find the right people who can own those responsibilities
- Carve out time every month and figure out how to document and add systems to your operations
None of these changes is easy and you’ll always have to keep working on them but with focus and determination you too can stop being THAT business owner and have some real hope for the future!
What do you think? Did we miss any big ideas? Do you know anyone who needs to be thinking about this? You should talk to them…or better yet, send them our way! 😉 We’d love to hear your thoughts – let us know in the comments below.
Shawn Kinkade Kansas City Business Coach