Ever watch one of those reality shows where some celebrity chef comes into a failing restaurant, yells at the staff, spits out the food, and then does a complete business makeover?
Pats on the back, chef is a hero, and everything is happily-prosperous-ever-after, right? They sure lead you to believe that with the mini-recaps at the end of those shows.
Here’s a sad truth: many of these businesses still go on to fail. Check the websites a few years or months later and they’re shut down. Out of business. Dunzo.
Why? It’s because no amount of money or celebrity thrown at a doomed business is going save it. Some businesses, even with the best intentions, are simply not sustainable. While that may sound harsh, it’s a fact.
I’ve become adept at spotting which ones are going to make it and which are sailing a failboat towards loser city. It’s partly because I’m intuitive but also because I’ve been in business a long time and I know what it takes to stay in the game for the long haul. (Note: I highly doubt any of these shows would ever want me to tag along because I’d be less likely to believe the after-makeover hype and more likely to say “They’re screwed, Gordon”.)
You don’t have to be intuitive nor a celebrity business expert to see the writing on the business wall. A little common sense and a reality check may reveal that your business is not sustainable. Here are ten signs that you’re heading in the wrong direction:
- You have never been able to take a paycheck. While it’s true that the first three years of a business can be a struggle, if you’re still not bringing in enough money to pay yourself five years on, you’re headed towards disaster.
- You can’t keep employees – or the ones you have suck. If your turnover rate is high, this says a lot about how you are running your ship. Good employees will stick around if a business is booming and the owners treat them well. You want great people working for you so it’s in your best interest to create a business where people want to work. Bad employees can ruin even the sturdiest biz. Hire well and treat your employees like gold.
- You’re a one-man or woman show and cannot keep up with the demand. There is such a thing as too much work. If you don’t have enough man-power to handle the work load, you’re going to crash and burn. Know when to ask for help.
- You’ve come to rely on passive income or affiliates to support your business. There are businesses built solely on this model. While it may seem like “easy money,” this is a recipe for failure. Why? It’s because now your income is reliant on someone else’s gig and you have zero control over it. (PS if you have a business that is created on not having to actually work, you need to check yourself.)
- Your paperwork is a disaster or non-existent. You haven’t paid taxes in you don’t know how long. I’ve seen tax problems shutter doors on many a biz over the years. If you cannot manage to keep your records and file on time, you’re going to have big problems down the road. Don’t blame the IRS if you’re not doing your part.
- You refuse to adapt to modern technology. You don’t have a website and you are still running things old skool (ex: fax machines and the Yellow pages). While some businesses can thrive without any of the state-of-the-art tech stuff, many businesses benefit from a major upgrade. Unless you are running a revered centuries-old family-run samurai sword making business, you need to be current. (PS no one uses the Yellow pages – they all Google.)
- You’re deep in debt. That’s a no-brainer but many businesses still try to limp along, even if they can’t pay their bills. Try operating your business while fielding phone calls from collection agencies or worrying that your lights may be shut off at any minute. That’s no way to work – or live.
- You’ve got a bad reputation. Poor customer service, sloppy craftmanship, rudeness, chronic lateness, lack of follow-through or a filthy environment can earn you negative street cred. While it’s normal to have a disgruntled customer from time to time, if your reputation stinks, you’re sunk. Do what you say you will and act like a pro. Clean up your mess!
- You’ve lost interest. The thrill is gone. No passion? Buh-bye business. People can tell when you are not in it it win it. Who wants to root for the team that doesn’t give a shit?
- The public has lost interest. They’ve moved on to someone who has more pizzazz, talent, works harder to take care of them – or is a better marketer. If clients start to dwindle and move on to the hot new thing down the street, you know what’s coming next. Unless you find a way to get their attention, it’s a good sign you’re slowly moving towards irrelevance.
If you see your biz in any of those signs, you CAN turn things around – and you don’t need to be on some business-makeover reality show to make that happen. It may take time and a lot of work, but it can be done.
Please remember this: entrepreneurship is rarely an easy gig and it’s not for everyone. Sometimes even the greatest idea or effort doesn’t lead to success. Do your best – but if it doesn’t work, know when to admit defeat and move on.
“It is hard to fail, but it is worse never to have tried to succeed.” ~ Theodore Roosevelt
© Theresa Reed | The Tarot Lady 2014
image from stock photography