WHY BUSINESSES FAIL OR SUCCEED
If you’re starting a business, you may be wondering how many businesses fail either in the short-term or the long run. Unfortunately, business failure is common: About 20% of small businesses fail in their first year, and a staggering 96% of businesses will fail over a 10-year period of time. As for the remaining 4%, it does not necessarily mean they succeed – it means that they’ve survived.
There are two common reasons why new businesses fail: either they don’t know what success means to them or they don’t have a clear path from point A, where they are when they start their company, to point B, where they want to be. A business map solves both problems.
Industries change so quickly, thanks to the constant development of technology, that a business plan is no longer enough to plot the future of your business with any certainty. Disruptive technologies or unexpected competitors can come along and displace your business overnight. How do you position your business in this hyper-competitive environment? Are you wondering how to make a business action plan that will lead you in the right direction? Do you know how to write a business plan that will turn your worries into wins?
That’s right. You need to stop focusing on how to set up a business plan and instead focus on how to create a business map.
14 REASONS WHY BUSINESSES FAIL
So why do businesses fail? What makes one entrepreneur succeed while another experiences business failure? It comes down to a combination of preparation, strategies and knowledge.
1. NOT HAVING AN EFFECTIVE BUSINESS PLAN
If you don’t have an effective business plan, you can’t properly communicate your vision to your team. We advocate not just having a business plan, but having a business map for entrepreneurs to take their small businesses to the next level.
Your business map will help you master vital stages of the business cycle, like scaling. Explosive growth can be tempting, but not scaling in a mindful manner is one of the biggest reasons why businesses fail – you have to strike the right balance between growth and infrastructure.
2. NOT PUTTING THE CUSTOMER FIRST
One of the top reasons why businesses fail is that they fall in love with their product instead of their customer. To circumvent business failure, fall in love with your client and figure out every single way you can meet their needs.
Anticipate what they want, what they need and, when possible, determine what they might not even know they need yet. Turn your customer into a raving fan – somebody who will tell everybody about your product or service or company. Once you grasp that your customer’s life is your business’ life, you can truly envision how to succeed.
3. NOT HIRING THE RIGHT PEOPLE
Hiring the right people has a massive effect on nearly every area of your business. One of the most obvious examples is sales: If you don’t have enough sales, you can’t pay your team or yourself and you cannot grow. Confident salespeople are a key to increased sales. It’s also astounding how many businesses fail due to inventory mismanagement. Hiring someone who is skilled at inventory management or using a good inventory management software is an easy way to solve this issue.
4. DOING IT ALL YOURSELF
Yes, you are an entrepreneur, but that doesn’t mean you have to do everything on your own. A business is only as strong as the psychology of its leader – and the ability to let go and trust others is an essential leadership trait. If you need to control everything, it’s likely you won’t succeed over the long term.
Delegating is a top skill to manage a business effectively: it helps you manage your time, focus your energy on what matters most and spot potential up-and-coming leaders within your company.
5. LACK OF FLEXIBILITY
Remember Blockbuster? Radio Shack? Tower Records? These giants of their industries all fell victim to the same reason for business failure: inability to adapt to a changing market.
Entrepreneurs who fall in love with a service or product and refuse to change directions when the market demands it are likely to fail. The key to long-term success – in business and in life – is flexibility and a willingness to pivot when necessary.
6. LACK OF INNOVATION
Peter Drucker and Jay Abraham, among the greatest business minds of our time, maintain that business failure – and success – all starts with two key factors: innovation and marketing.
Innovation means finding a better way to meet your clients’ needs than anybody else. Anybody can make some money for some amount of time. But if you want to become successful and sustain that success over years and over decades – if you want to build a brand – then you have to find a way to add more value than anybody else in the game. And that comes from constantly innovating.
7. NOT UNDERSTANDING YOUR INDUSTRY
This is one of the driving factors behind why businesses fail to innovate. Certain industries require more innovation, while others may have different product life cycles.
Consider the technology industry. The life cycle on an average product is about six months. And in some sectors, like the app business, it’s just one month. People expect continual innovation and improvement, and if you don’t deliver that to them, someone else will. It’s a different world we live in today, where the only constant is change. And if you aren’t staying ahead, you’re falling behind.
8. FEAR OF BUSINESS FAILURE
Business failure is one of the main, if not the biggest, fears of any business owner. If it weren’t for that fear, we wouldn’t even be asking, “Why do businesses fail?” However, as you develop your entrepreneurial and managerial skills, you will find that one of your greatest assets in running a successful business is overcoming your fear of business failure.
Without minimizing the validity of your fears, you need to learn to view business failure as a learning opportunity rather than an insurmountable obstacle. Remember, life happens for you, not to you.
9. THE WRONG MINDSET
One of our central philosophies is that our mindsets create our realities; what we believe influences what we are able to achieve. As entrepreneurs, when we embrace strategies for turning business failure into success, we transform our mindset from one of defeat into one of empowerment.
And when we are empowered, a failing business is not the concluding chapter in our story; it is only the beginning. Don’t let your limiting beliefs disempower you. Instead, stay hungry in your search for success. Your hunger will inspire you and pay off in the end.
10. LACK OF VISION
Marketing guru Jay Abraham understands the question of why businesses fail. It’s a high-velocity and high-leverage mindset that prepares business owners to navigate the ever-changing seas of business. Rather than adapt your dreams to the economy, you must set and achieve your own goals, independent of circumstances. How can you accomplish this? By recognizing that business success hinges on loyalty to a vision.
11. LACK OF PASSION
A passion-driven mindset lets you persist in honing your ethics and beliefs while learning from all the reasons why businesses fail. By adhering to your passions, you’re able to see your circumstances clearly – the positives and negatives.
With this level of focus, you create an unstoppable drive to accomplish your goals. This focus allows you to take risks, acknowledging that feelings of doom and failure arise not from circumstances but from feeling stuck in the status quo. Don’t get stuck – persist.
12. INEFFECTIVE MARKETING STRATEGIES
Whether your company is large or small, marketing is the next critical step. Why do businesses fail in their operations? If you cannot find a way to market your product or service, then your business will have a hard time getting off the ground.
Because the truth is, you could have the most innovative product or service, but the best product doesn’t always win. Do you think McDonald’s has the best burger? Probably not. But their marketing strategies are top-notch.
13. NOT UNDERSTANDING YOUR X FACTOR
To market effectively and prevent business failure, you have to understand what your “X-factor” is.
At its core, an X factor is a way of thinking about who you are, what business you are in and what you can bring to the marketplace. Whether it’s a vision or a way of gaining clarity around your outcomes, your X factor allows your company to do more for your clients that your competitors. An X factor doesn’t always have to be an industry disruptor, it can be your culture, your mission or something else small but meaningful.
Creating an X factor requires a combination of skills, psychology and experience to find your competitive edge. To start, honestly answer the following questions:
- What makes your company stand out?
- How do you offer your customers the most value?
- What is your company great at?
- What makes you stand out individually?
- What could your X Factor become?
Defining what and how you can continually add value to your clients will see you ahead of the competition and keep your business growing for years to come. This is your opportunity for your business to stand out, innovate and develop new solutions, create raving fan customers and annihilate the competition.
What are you here to deliver and how can you improve your customers’ lives?
Take, for example, FedEx founder Fred Smith. Even in FedEx’s early stages when profits were slim, Smith invested in three market studies for testing the value expedited shipping would add to his product. Smith’s research paid off: He discovered his X factor and FedEx is now a household name, in large part due to its corner on the market via expedited shipping.
14. ASKING THE WRONG QUESTIONS
To help discover what your true value is as a business, go one step further and ask yourself the right questions. This includes core questions like: What does the marketplace need? Who is my customer? What can I do to make my company talkably different? And perhaps one of the most important questions you can ask yourself is, “What business am I really in?”
SOLVING BUSINESSES FAIL
Your business is moving along, delivering on its product or service, when its wheels seemingly get stuck on the tracks. Perhaps it’s an employee issue or trouble with delivering your product to customers.
Whatever the business problem may be, it has a ripple effect on the rest of your business.
Does this sound familiar?
You’re not alone. If you’re running a small company or startup, you have likely already faced some common business problems – and if you haven’t, you will soon. In order to solve business challenges, it’s essential to be prepared, identify them early and make a plan to overcome them.
When determining what issues your company is currently facing, it helps to break your business challenges into two sections: current business problems that you can quickly fix, and deeper business problems that require more intensive repair.
Some examples of current, surface-level problems are:
1. EMPLOYEE TURNOVER RATE
2. INCREASE IN COMPETITION
3. FALLING SALES
Some examples of current, DEEPER BUSINESS ISSUES ARE:
You certainly need to fix issues like that, but they likely aren’t the root of the problems your business is facing. In order to succeed, you need to get to the core of what’s really holding your company back. For most businesses, they fall into one of nine categories.
HOW TO ELIMINATE COMMON BUSINESS FAILURE
Every business experiences problems, regardless of your industry, business size or the phase of the business cycle you are in. If your business is stagnant, you feel stuck or you’re not experiencing the growth you desire, be on the lookout for these nine common business problems.
1. KNOW YOUR PURPOSE
Does your company feel adrift? Do you change your mission statement constantly? If so, you’re experiencing one of the most common business problems – lack of purpose.
Being a strong leader is synonymous with having a sense of purpose. When you truly believe you will be successful, you will see your business thrive. Your purpose gives you passion, drive and certainty. It gives you the ability to overcome towering obstacles.
A business is only as strong as the psychology of its leader. It’s up to you to do the work and bring purpose to your company.
2. HAVE A STRONG BRAND IDENTITY
One of the biggest business problems in the growth stage is not settling on who they are. Developing your brand identity is vital to your marketing and sales success. Your identity epitomizes what your company stands for – your core values, mission and goals. It deeply affects your company culture, which in turn affects whether you can hire and retain the best employees for the job.
Your brand identity is what drives the emotional connection with your consumer and ultimately creates customer loyalty. Without a strong brand identity, you don’t actually know who you are or what direction you’re going. Without that direction, you won’t know what audience to target – and you definitely won’t inspire raving fan customers.
3. PROVIDE VALUE
Shrinking profits is among the common business problems. Left alone, they can lead to bankruptcy. When this happens it’s easy to shrug it off and blame the market. But if the market shifts, it’s for a reason. If customers are going to your competitor because they offer a service or feature that you don’t, that is because they deem that service or feature valuable. When you don’t provide what the customer desires, you’re not providing them with value.
To be successful in business, you must practice constant strategic innovation. Determine your X-factor – what sets you apart from the competition? How do you bring more value to your customers? What makes your company talkably different? If you don’t know the answers to these questions, it’s time to sit down and think about them.
4. PLAN AHEAD
Purpose and identity are crucial to your success, but don’t forget about making a plan. And don’t just make any plan – make a massive action plan (MAP). Making a MAP instead of a traditional plan allows you to stay agile in response to business challenges while always keeping your eye on the prize.
For example, most business owners aren’t prepared for a recession despite the fact that the economy has spent over 60% of its time in a recession since 1879. It’s easy to feel confident during good times, but it’s the hardships that matter.
A MAP acknowledges and addresses how your business will fare if there is a downturn in your income, whether it comes from a recession or the shifting valuation of your product or service. If you haven’t built your business stoutly enough to weather potential storms, you won’t sail far at all. Get prepared for a recession and other negative economic possibilities before they happen.
5. HAVE AN EXIT STRATEGY
No one wants to think about the end of their business, which is why so few owners bother with developing exit strategies. But the goal of your business is for you to eventually leave. This could come in the form of arranging a leveraged buy-out, leaving the business to your children or selling the business to key employees. The point is, knowing what the preferred end of your company will look like helps you develop the best path to get there.
Forty-five percent of business owners spend over 40 hours a week in the office and never find a way to extricate themselves so they can pursue other passions. Sound like you? It’s definitely time to start working on your exit strategy.
6. CONTROL UNCERTAINTY AND FEAR
Nothing in this life is ever guaranteed, but new business owners often allow the fear of uncertainty to affect how they run their organizations. Fear of failure, fear of not being a good enough leader and fear of the economy’s future can put you in a scarcity mindset and negatively affect decisions and behaviors. By becoming hyper-focused on these things, you set your business up for failure instead of taking the steps necessary to achieve success.
If you have these fears, identify if they are based on limiting beliefs. Change those beliefs to empowering ones that help you thrive as a leader. Instead of letting fear ruin your business, use that fear to push you to greater heights. When you decide that success will happen no matter what, many of your business problems will resolve themselves along the way.
7. HARNESS THE POWER OF TECHNOLOGY
New entrepreneurs often make the mistake of thinking they don’t need technology. Some think this because they have an old-school mindset and don’t realize all the powerful pieces of tech that are available. Others think that they are in a type of business that doesn’t need technology to succeed. In today’s economy, harnessing the power of technology is a requirement if you want to avoid being disrupted by competitors.
From artificial intelligence to automation, emerging tech has a place in every business no matter how large or small. Address these common business problems by having strategic innovation meetings with your team to discuss new technology and how it can be incorporated into your business to beat your competition.
8. HAVE THE RIGHT SKILLS
Success is 80% psychology and 20% mechanics. It’s vital to shift your mindset, control your emotions and be decisive in business. Yet it is also vital to take a realistic look at your strengths and weaknesses. Business owners need certain skills, like reading financial statements, hiring the right employees and scaling mindfully.
Your own psychology and skillset is the foundation you’ll build the rest of your business around. If you don’t seal the cracks and strengthen the base, you can’t build a sturdy structure. You can develop these skills if you desire – or you can outsource them so that you have the time to focus on other aspects of the business. Being honest about what business challenges you face now or are likely to face in the future is the foundation you need to scale your business in a solid manner.
9. ASK FOR HELP
If you find you lack certain skills, one of the biggest business challenges you can face is your own inability to reach out to available resources. Being a great leader doesn’t mean that you have all the solutions – but it does mean that you use everything at your disposal to get the job done. One of the top traits of a leader is resourcefulness. The best leaders leverage what they do have in order to fill in the gaps – especially when it comes to their businesses.
Stop telling yourself the story that “strong leaders don’t ask for support.” Once you do, you’ll find that business help is out there.
Sign up for a free CEO Strategy Session and discover new strategies that will skyrocket you to success. You won’t just solve your current business challenges – you’ll also create a blueprint for lasting change throughout your organization.
EXAMPLES OF COMPANIES EXPERIENCING FAILURE
Even the biggest businesses were startups once. No matter what type of industry you’re in, you’re probably experiencing the same challenges faced by businesses around the world. Though they seem unique to you and your team, they are often universal. How do you view the business problems you face? Are they obstacles or are they opportunities for growth?
Apple overcame numerous business challenges – and near bankruptcy – before becoming the force of nature they are today. And they didn’t do it by thinking small. When sales were down, they didn’t think about how to sell more computers. They turned to marketing and innovation to solve their problems and ended up creating the iPhone.
Another business that experienced and overcame problems is Starbucks. This billion-dollar coffee chain saw its earnings drop by more than half during the 2008 recession. The company brought back CEO Howard Schultz to right the ship, and he showed exemplary crisis leadership: He asked himself what business they were in – and it wasn’t coffee. He put the focus back on the customer and brought the company back from the brink of failure.
Remember, business problems are just opportunities in disguise. It’s time to stop living in fear of what’s to come and start building the skills and mindset you need to overcome any challenge.
SOLVING BUSINESS FAILURE AN ESSENTIAL SKILL
We all know someone who always seems to have the answer. They’re prepared for any situation and solve problems quickly and decisively. These people are typically great leaders in business and in life. But is business problem solving a natural talent? Or is it a skill you can develop?
The truth is that business problem solving is a set of skills and strategies that anyone can learn – and it’s more important than ever.
With the economy in a winter phase and the nature of work transforming before our eyes, there’s no shortage of business problems to solve in today’s economy. Learning how to solve business problems effectively requires focus, decisiveness and self-awareness.
Whether you’re managing a new company or just starting as CEO at a global enterprise, you’re sure to encounter business problems to solve. Dealing with crises. Employee turnover and unhappiness. Inability to scale mindfully. Financial problems. Leadership gaps. Without creative thinking to solve business problems, these issues can quickly build up and lead to the one thing you certainly don’t want: the close of your business.
Strong leadership and decision-making have the opposite effect: one study even found that extraordinary leaders can double profits at their companies. Business problem solving is an essential skill not only for owners and CEOs, but anyone with entrepreneurial desires or career-climbing dreams.
SOLVING BUSINESS FAILURE EFFECTIVELY
Business problems to solve are easy to come by – the skills needed to make tough choices and act decisively are less common. But with the right strategies, you can develop them and learn how to take your business to the next level.
KNOW WHERE YOU WANT TO BE
Business problem solving always starts with having a plan. If you don’t have goals you’re working toward, you’ll never know when you miss them. The signs of business problems will pass you by.
A traditional business plan isn’t enough, because it only shows you how to get from point A to point B. You need to create a business map – a holistic view of your vision, your mission and all the possible business problems to solve. This map will keep you moving along the route to your ultimate goal: scaling your business and planning an exit strategy.
CREATE A BUSINESS MAP
A business map looks at your business in terms of roles, responsibilities and standards. It’s not just a way to get from point A to point B or to achieve certain goals – it’s an in-depth look at what’s working or not working in your business and a path to make changes or improvements that will achieve greater success.
A business map allows for a top-down view of how your business works. It does more than just identify where you want company growth to be in two years or how hiring a sales team will lead to greater profits. Instead, it revolves around introspection – regarding everything from processes, inputs and workflow to why you’re in your particular field and the impact you want to have on your community.
A business map can come in many forms, including flowcharts, diagrams and value stream maps, or it can be created with various types of software. Don’t get caught up in the details and choose a combination of modules that work best for your company. The format is less important than the questions you ask to develop it and the mindset behind it.
THE BENEFITS OF A BUSINESS MAP
The process of creating a business map goes deeper than a business action plan. Not only does it address growth possibilities, sales and other surface issues, but it delves into what your business does, who’s responsible for what and what standards need to be met to determine success.
KEEP THE FOCUS ON THE BIG PICTURE
The goal of a business map is the same as a business plan: to be more effective. However, it takes a more holistic approach to get there. A business map ensures that the big picture of your company is always front and center. It not only helps with your company’s long-term goals, but it also helps you and your team keep the business vision in sight on a day-to-day basis. You don’t just use your business map during the growth phases of your business – you use it for the life of your business.
PROBLEM SOLVE MORE EFFECTIVELY
You can’t solve problems if you don’t know what they are. Business maps will reveal where your company really is – and what its true problems are. They allow you to take a step back from day-to-day management tasks and see your business holistically. A business map also involves soliciting input from your employees on the front lines about the challenges and issues they face every day, giving you valuable information that will help you solve problems and make tough decisions.
ALIGN INTERNAL PROCESSES
Many business problems are the result of poorly designed internal processes. You might experience high employee turnover, poor inventory management, a large amount of manual labor or other inefficiencies that can cost you time and money. A business map will help you identify these inefficiencies and establish best practices to fix them. And that will help you scale the business, drive revenue and overcome challenges more easily.
BETTER MANAGE RISK
While some people tolerate risk better than others, the fact is that business ownership always comes with risk. Risk can create a business’s highest highs – Netflix certainly proved everyone wrong and changed the media industry when it changed its business model. It can also lead to complete failure – Hostess, Converse, Polaroid and others have all gone bankrupt more than once. A business map can help you manage risk and compliance by documenting and managing your processes to help employees understand their responsibilities.
When you design a business plan, you create a rigid framework with specific goals and actions. When you create a business map, flexibility is the goal. In industries that change on almost a daily basis and where businesses are at risk of being disrupted, flexibility is key. Though your business map plan will have structure, it will also be able to respond to any changes that occur with your customers, the economy or the industry. This helps you create an innovation culture and foster growth. Changing your mindset to one of flexibility helps you develop empowering beliefs that will permeate your entire organization.
HOW TO CREATE A BUSINESS MAP
Get major players involved when you create a business map. To turn your employees into raving fans of your business, ask for their input and implement their ideas. Schedule regular meetings to create a business map, improve the map and identify when goals are achieved. Assign team members to different tasks including project managing, writing out action plans and taking the appropriate next steps. At your meetings, ask yourself the following questions.
1. KNOW WHERE YOU ARE
The next step is to get real: be honest about where your business is currently. Look at your financial statements. Survey your employees to get an idea of business problems to solve on the front lines. Ask your colleagues and others in your industry where they are so that you can compare.
It’s important to be realistic at this step. If you have a high risk tolerance, you may be tempted to be overly optimistic. If you’re a perfectionist or have low risk tolerance, you could be more negative than you need to be. Avoid falling in love with your product or your company and make sure you’re taking an objective look at where you are.
2. IDENTIFY THE PROBLEM
In much the same way you ask “What business am I in?” and then “What business am I really in?” you can ask, “What’s the problem?” You’ll likely identify a surface-level answer, like “sales are dropping.” Then ask, “What’s really the problem?” Sales are affected by multiple other business problems to solve, from recruiting top salespeople to providing excellent customer service.
Business problem solving often goes back to the customer. You must provide them with more value than anyone else, through your product and your customer experience. If you’re having trouble identifying your business problem, start with these areas.
3. UNDERSTAND THE PROBLEM
It’s tempting to jump right to solutions once you’ve identified the problem. But pulling weeds out by the top is never effective. You need to get to the root of the issue. When was the last time you did a competitive analysis or surveyed your customers for feedback?
It isn’t enough to perform a typical SWOT analysis and leave it at that. Creative thinking to solve business problems starts with listening. When you listen, you’ll receive data – the opinions of customers, the strategies of competitors. That data will tell a story. Only when you uncover this story will you be able to pull the weed out by the root.
4. FOCUS ON SOLUTIONS
Tony tells us to “Identify your problems, but give your power and energy to solutions.” Now is the time for solutions – but you can’t do it alone. Get together with your team or your colleagues and brainstorm. Ask the right questions so that you get honest, productive answers. Model various scenarios and rank them based on their outcomes. Apply a framework like the Rapid Planning Method to help you.
Get a second opinion from your mentor or a group of trusted advisors outside of your company. Sign up for business coaching to run your questions by an expert. Narrow down your options until you’re confident you’ve come to the right solution. Then create a massive action plan and put your business problem-solving skills to use.
SCALING THE BUSINESS TO PREVENT FAILURE
The concept of scaling a business is often used interchangeably with growing a business, but these are two distinct concepts. Take successful startups or new small businesses: Without a clear definition of scaling a business, we mistakenly think of these companies as successful because they achieved massive growth in a short period of time.
The reality is, when a company grows too fast, it makes itself vulnerable to a range of problems stemming from not having created a sure foundation to support rapid development. Learning how to scale a business mitigates these risks by ensuring that foundational operations are created that will support growth in the long term.
HOW TO SCALE A BUSINESS
What is scaling in business? To create a working definition of scaling a business, first consider what it means to start and grow a business. You started your company to fill a need in your market, make a profit and likely fulfill a dream. You need to grow your business in order to keep it profitable and expand your market reach. Many people think of business expansion as “hockey stick growth,” where there is an initial period of linear growth, but once the business hits an inflection point, revenue shoots up sharply.
As alluring as rapid growth can be, entrepreneurs often place their focus on achieving it right away and lose focus on what matters. The problem with that sort of tunnel vision is that it diminishes the importance of the period of linear growth that comes before the rising handle of the hockey stick – that is, the blade. The blade typically lasts about three to four years, and it is where the most important work is being done.
Scaling a business means utilizing this “blade period” to put systems and procedures into place that will prepare you for lasting, profitable development. The blade period is where you establish your core values, your company culture and your brand identity. It’s also where you will develop the client experience you want to provide and create the initial business model when you take your product or service to market. In short, it’s the make-or-break period of any business.
Scaling a business is not easy to do, which is why it should be done as thoughtfully and meticulously as possible. Because in the long run, when you do hit that surging growth curve, you need as solid of a foundation as possible to hold you up. Here are the most important things to keep in mind when figuring out how to scale a business in a mindful manner.
TIPS TO SCALE A BUSINESS
When we talk about scaling a business, we’re referring to strategies for growth that align with your original business vision while managing the impact of growth on your company. Implementing the following tips for how to scale a business form a sustainable scaling strategy you can rely on.
1. KNOW YOUR PURPOSE
Scaling a business is reliant on creating customer loyalty. The best way to create customer loyalty? Focus on employee loyalty first so they can spread the word and pass their enthusiasm for your company on to those they serve. Employees are loyal to companies whose purpose and values align with their own so they can feel their careers have a higher purpose. Learning how to scale a business will ultimately fail if you don’t first start with your “why” of going into business in the first place. Knowing your purpose and successfully communicating that to your team is the way to make them raving fans of your company and drive growth in an organic manner.
2. DEVELOP A BUSINESS MAP
Most entrepreneurs have a business plan, but have you thought about developing a business map? Business maps are an effective, comprehensive way for scaling a business and meeting its goals. Creating a business map prompts you to ask foundational questions such as: What business are you really in? What was your reason for getting into this business in the first place?
Business maps encourage and challenge you to look at where you came from, define your purpose for starting this business and look ahead: What’s next for your business and where does your company ideally end up? Having this sort of documentation of your goals is a crucial part of learning how to scale a business and will be a helpful reference for when times get tough.
3. PERFECT YOUR PRODUCT OR SERVICE
With their focus on massive growth, many business owners forget to ensure that their product or service is solid. They often figure that they will just fix it after getting more users or more distribution. However, if you don’t work out the kinks and get rid of the bugs now, they will only get worse when you are scaling a business. This is why learning how to scale a business before pursuing growth will save you headaches and money in the long run. The early years of your business is a time to listen to feedback, find issues and improve your offerings until they meet your customers’ expectations. When you focus on creating a product or service that is of excellent quality, many of your growth issues will take care of themselves. Working on the issues in your first version also helps you assume more control when you scale your business because you will have a deeper understanding of what you and your customers want and need your product or service to be.
4. CREATE THOUGHTFUL PROCESSES AND OPERATIONS
How to scale a business doesn’t just involve growing upward and outward – it also means ensuring that your internal processes and operations are functioning seamlessly. The last thing you want is to start losing customers you’ve worked so hard to acquire because some part of your infrastructure is weak. While perfecting processes, keep in mind that some of the systems and processes that work when your company is in its early stages won’t work on a massive scale. This is where adaptability and flexibility come in, as you may need to tweak processes as you grow. Establishing a framework of what works and keeps your business running smoothly in the early years is key to scaling a business because it forms a solid core. While you can always improve on this core as growth occurs, it’s much more difficult to go back and create it once you’ve grown past a certain level.
5. ESTABLISH YOUR TEAM
It may seem obvious that establishing a strong team is a prerequisite for scaling a business – you can’t handle everything on your own. Developing a management team that is flexible and can grow with the company is an important component when it comes to learning how to scale a business.
Your team is not just about your employees, though. To master how to scale a business sustainably, you must work on developing external relationships with suppliers, partners and other outside organizations who will be part of your overall growth.
One of the best things about operating a small business is the ability to establish intimate relationships with your customers. You get to give them the experience that you want from beginning to end. And the goal should always be to create a raving fan – someone who will be a staunch advocate for your brand and help you scale your business by spreading the word.
Remember, the community that you create around your business can bolster your foundation so that you have even more strength and leverage as you grow. Having a solid network is so important it’s part of the definition of scaling a business. So take the time to really build the “team” that will propel you into the future.
6. LEARN WHEN TO DELEGATE
If you’ve built a strong team, you should have enough trust in them to delegate many important tasks so you can work “on” the business instead of “in” it. However, as a business owner, you want to feel like you’re involved in every aspect of your company and will sometimes have a hard time letting go in certain areas. To really learn how to scale a business, you must delegate tasks to those on your team. What are you doing that someone else could handle?
Don’t trade your time for dollars. Your business has to be able to run itself and thrive even when you’re not there. Do this by addressing limiting beliefs such as “If I want something done right, I have to do it myself” and by establishing delegation habits that allow you to own your time.
7. BUILD YOUR BRAND
Scaling a business requires learning who you are as a company and what you offer your customers. How do you compare to the competition? What do you have that no one else does? What are your biggest weaknesses? What makes you so powerful? What is your message? How do you disrupt your industry?
It could take years to answer these questions, but you can at least start with a basic framework and build from there. Smaller businesses have the benefit of being able to shift gears more readily than larger corporations. So if there is a need for a new approach, use that as an opportunity to innovate and adapt.
Remember, your brand will also set the tone for your company’s culture as you scale your business. It will set the standard for how you make your hires and will help you establish the kind of client experience you want. It will impact marketing, sales and design efforts, and it will influence the kind of company you ultimately become.
8. CONNECT WITH YOUR CUSTOMER
What is scaling in business able to accomplish if it doesn’t also produce loyal customers? Not much. Creating raving fans of your product is critical for your business to thrive amid the ebb and flow of ever-changing consumer preferences. When you’re scaling a business, you’re in an incubation period where there’s room to test approaches to building and maintaining client relationships. This is the time to build client-centered practices into every facet of your business. You want every member of your team to demonstrate empathy, respect and open-mindedness internally so that a collaborative culture of innovation emerges. From there, everyone on staff is able to build rapport with your client, creating connections that will help your product sell itself.
9. WORK ON YOUR NETWORKING SKILLS
“No man is an island,” and this is even more true in the case of entrepreneurs who are scaling a business. You must develop and cultivate a vast network of colleagues, business coaches, resources and mentors who can connect you to the right people and ensure you continue to grow. Attend regular business networking functions in your city or join an industry-related group that offers continuing education and connections to other professionals. Get involved in personal or business coaching and reach out to those who have been in business longer than you to see if they are willing to connect and possibly become your mentor. Scaling a business is not a solitary task. The more people you have on your side, the more successful you will be.
10. PRIORITIZE SUSTAINABILITY
As important as creativity is for any company, running a business is not the place for knee-jerk decisions. Rather than thinking of creativity as a free-for-all tool for solving problems, think of it as a tool for scaling a business. When you prioritize mindful, sustainable growth, you learn to approach challenges thoughtfully so that the solutions you find support your company’s long-term well-being.
11. CONTINUE ADAPTING AND INNOVATING
Scaling a business may seem impossible if you’ve hit a plateau. The truth is, learning how to scale a business is never impossible, but you may need to change what you’re doing if you want to scale successfully. When was the last time your business focused on innovation? When did you last assess what’s holding your company back and tackle those barriers head-on? In business – and in life – if you’re not growing, you’re dying. Don’t change your company just for the sake of change – when you strategically align your choices with your ultimate purpose, scaling your business will come easily. Take the time and do it right. Adopt a winning mindset, but be mindful as you do so. Remember that massive growth is one thing, but it’s sustainable growth that makes for a lasting company.
CREATE AN EXIT STRATEGY TO PREVENT FAILURE
AN EXIT STRATEGY BUSINESS PLAN IS YOUR TICKET TO A SMOOTH LANDING
Every business reaches a point in its life cycle where it is time to either move up or move out. Your business may be doing well, inspiring you to pursue even greater success by selling, buying out, maximizing shareholder value or seeking additional investment.
On the other end of the spectrum, you might be ready to let go of your business due to personal or professional reasons. Whatever your position, making an exit strategy is your lifeline for a smooth, intentional transition.
To make an exit plan that will reliably protect you and your assets, you need specific resources to overcome the pain points of this business cycle stage. An exit strategy for small business answers questions like how to sell your company if it is successful, whether to save or close it if it fails and how to handle financial losses it incurs along the way.
PAIN POINTS OF MAKING AN EXIT STRATEGY
By making a solid exit strategy business plan, you empower yourself to handle the challenges common to mature businesses. Even prosperous businesses encounter bumps along the way, often in the form of financial losses or dysfunctional business partnerships.
Depending on your life circumstances, you may be tired of doing business due to health issues, retirement or other personal reasons. This is when the thought of leaving the business world altogether becomes an exhilarating light at the end of the tunnel.
The nature of the challenges you’re facing will determine your exit strategy, as will your end goals in leaving or growing the business. If your company is thriving, you’ll be challenged to choose from the many options for expanding an already-successful business.
If your business is on the fence or failing, you’ll face the seemingly life-or-death question of whether to revive it or let it die. Given all that could go wrong, you may feel overwhelmed creating an exit plan to minimize these risks. No matter what route you take, you’ll have to make some difficult decisions regarding your company’s future.
KNOW YOUR OPTIONS TO CREATE A SOLID EXIT PLAN
Before you begin working on an exit strategy business plan, identify what’s driving you. If you want to stay in business, ask yourself: Do you want to stay to make more money, or are you staying because you’re afraid to leave? If you want to leave, pinpoint why: Are you reacting to a bad business relationship, or are you making a reasoned decision? Honest answers to these questions will determine the exit strategy you choose.
The most common types of exit strategies include selling to a friendly buyer, paying yourself the maximum now with nothing left to sell upon closing or declaring insolvency.
If your business is insolvent (unable to pay its debts), you’ll likely have to choose between liquidation (converting your assets to cash to pay off debts) and bankruptcy (making formal arrangements with your creditors to repay them, which could entail selling your company).
If your business is on the fence, get to the bottom of why it’s failing before making your exit strategy business plan. Financial loss can be an opportunity for growth if you accept the challenge.
The Power of a Great Question for Lasting Happiness, Joy, Growth, and Fulfillment
: How is the MKS Master Key System Plan Different From Other Planning Processes?
The unique approach of the MKS Master Key System Plan process is the attention we devote to getting perspective. All too often, the temptation is to move straight to planning.
In the process, which has been around for 40+ years, we spend up to 70% of our time getting clear perspective across every area of your life – your backstory, your current reality, your talents, your heart, and your thinking; and across every domain of your life – personal, family, vocation, and community.
Only when you have clear perspective do we move to planning. We don’t just guide others; all of our Plan Guides have themselves gone through the process and are living out their own Plan; we only guide others on a journey that we ourselves are on.
: What’s the Best MKS Master Key System Plan Option For Me?
All of our offerings can help you to craft a plan for your life that activates your life purpose and moves you toward your life vision. Our recommendation is always for our customized 2-day experience (3-days for Couples) facilitated in person with one of our MKS Master Key System Guides.
There’s nothing quite like setting aside dedicated time to strategically pause from life to discover what’s truly unique about you and to put a plan in place for moving forward.
If the full MKS Master Key System Plan experience is beyond your means for now, our self-guided Plan Launch option is purposefully crafted to help you to discover your unique creative purpose. Each MKS Master Key System Plan experience is designed to guide you towards increasing levels of clarity around your identity, purpose, and impact.
: How Much Does a MKS Plan Cost?
The MKS Master Key System Plan experience is an investment of time, effort, and resources, and is crafted to pay dividends throughout the rest of your life. The 2-day Plan is $6,000, and the 3-day Couples Plan is $9,000.
For those in full-time nonprofit we offer discounted pricing that reduces the cost of the 2-day Plan to $5,000, and the 3-day Couples Plan to $7,500.
The cost of our MKS Master Key System Plan Retreat offering for teams is set once we’ve customized the approach for your team. We are honored to come alongside you in your Plan journey; nothing matters more to us than guiding you to make your greatest impact in life.
: How Do I Get Connected with a MKS Plan Guide?
We will connect you with one of our team of Guides who will speak with you by phone to learn more of your story and determine the best path forward. We continually engage with our Guides to ensure their work is of the highest quality.
We are deliberate in matching the right Guide with each client to create the greatest leverage of your time and investment into you MKS Master Key System Plan. Sometimes the Guide is in the same geographic area as you, but not always; fit is more important to us than location. We also offer opportunities on Zoom or over the phone.
Learn More About How the MKS Master Key Plan Can Help You Get Lasting Happiness, Joy, Growth, and Fulfillment.
We love coming alongside people making their greatest contribution, and we’re excited to talk to you. Our calls are a lot like our work — curious and creative conversations to explore where you’re at and where you want to go. Based on the perspective we glean together, we’ll talk about what next steps might serve you best.
Thank you for your time in reviewing this information. I hope you understand how we have helped others and how we can help you.
Wishing you prosperity and success. Remember You Were Born To Win!!
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