Right now, there are 7 things you’re doing that could put you out of business.
You could be destroying your business right now. The worst part is, you don’t even know it. Every day you take small actions that chip away at the value of your company. One day you may reach the tipping point when the company will fail and you’ll wonder how you got there.
Don’t let that happen. Here are seven ways you could be slowly destroying your company—and seven ways you can save it.
1. Not building a management team that can run the company without you. You hire managers, but don’t empower them. You are still making all the important decisions and everyone in the company knows it. This keeps you at the center of attention. This may feel good, but you are the weak link in building a strong company.
Save your company: Have monthly meetings where managers take responsibility for directing their area. Let them make recommendations and implement mutually agreeable solutions.
2. No exit strategy or succession plan in place. Even entrepreneurs don’t live forever! When you want to leave the company, the business will crumble without a proper plan in place. And without a proper plan, there is no sustainable value in your business. Sign up to stay ahead with our once-a-week Newsletter, Business Class: The Brief.Expect handpicked insights and inspiration for small businesses – straight to your inbox.Subscribe
Save your company: Clearly identify a “number 2” person. Spend time away from the business to see how it operates without you. Take steps to map out various exit scenarios such as sale, death or strategic merger.
3. Paying your best employees too little. Let’s face the fact that you likely take advantage of your best employees. They are always willing to do the most and best work for less comparative compensation than others.
Save your company: Pay them 10 to 20 percent above market rates. These “golden handcuffs” will make them even more loyal and motivate them to continue contributing their best to the company.
4. Not talking to your competitors. You ignore your competitors completely.
Save your company: As Chinese general Sun Tzu wrote: “keep your friends close and your enemies closer.” Talk regularly to your competitors to learn about the marketplace. Check out John Forbes Nash’s “coopetition” strategy, which can be more profitable than competition.
5. Not meeting with customers. Stop sitting in your office or going out to lunch with only your employees. While you’re at it, stop relying on industry research or secondhand knowledge. While this may be comfortable, not knowing what paying customers really think harms your company.
Save your company: Meet a different customer every week. Learn about their business and how your company helps them.
6. You sell only what interests you. You believe you know what customers want without asking them. Remember, there was only one Steve Jobs.
Save your company: Regularly discover the pain you solve for customers and who will pay to fix it. It doesn’t matter what you want to sell—it matters what customers need to buy. In any economy, people buy painkillers more than vitamins.
7. You don’t review your balance sheet and cash flow statement. You run the company based on gut feelings and not the official numbers. You’re afraid to meet with your accountant.
Save your company: Review these statements monthly and ensure you understand every number on them. You’ll be surprised at how you will make better decisions based on facts.
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