By Ben Kinsey, CPA
|Image courtesy of flickr|
What the article stops short of pointing out is that even if there is a huge demand for a product, unless the company that produces it hits the ground running, it won’t be long before the competition shows up. The sad fact is, no matter how revolutionary your product is, it won’t be long before similar products hit the market that will soon try to eat your dust.
Case In Point: When Steve Jobs introduced the iPhone back in 2007, Apple literally had the smartphone market to itself. However, within a couple years, Google introduced the Android and the race was on. Even after threatening to take the battle thermonuclear, Apple was not only unable to dominate the smartphone market, it’s share of smartphone sales steadily dropped until it now only commands a paltry 17% of the market it started. (Quote by DazeInfo)
|Image courtesy of flickr|
How new are you?
The first mistake many fledgling business owners make is to think they are going to set the world on fire by bringing a new product to market. If that fails to happen, many times this discovery quickly turns into a death knell that quickly spells doom. The reason many startups fail to thrive is simply because their founders didn’t take the time to sufficiently research the market they were looking to get into. Better established businesses can also fall into this trap when they try to expand their reach into new markets. The bottom line is in business, if you don’t look before you leap, don’t complain if you discover it’s a long way down.
If you want to avoid the agony of defeat, you need to do your homework:
1. Research the market and your target audience before you develop a new product or market.
2. Make sure you test the water before you jump in with both feet by test marketing.
3. Analyze the results of the test and tweak the product, the marketing or both before you launch your ad blitz.
4. Only forge ahead when the numbers favor it, not by gut instinct alone.
Here we grow again.
|Image courtesy of flickr|
Even if your business sustains sure and steady growth, don’t for a minute think it will always be smooth sailing. Just as there are a number of shoals and reefs waiting to suck an unsuspecting sailor down, in business there are also many common pitfalls waiting to trip up a well-oiled business plan.
Here are some of the most common problems:
1. What would your business do if one of the key members of your team quit, retired, died or was hired away by a competitor. If there is a single individual or a handful of key technicians that your business relies on, you need to have a plan in the event any of these providers suddenly departs the company. Far from having to duke it out head to head with your firm, a wily competitor could cause your business irreparable harm simply by wooing one or more of these key employees away from you.
2. Does your company have a written policy manual? If the answer is no, your growing company can face an onslaught of potential litigation from employees. In this litigious society, everything from sexual harassment to being passed over for promotion can put the crosshairs on your company in a hurry if you don’t have any set guidelines to help steer the treacherous in-house waters.
|Image courtesy of picpedia|
4. Poor planning prevents peak performance. There’s a lot to be said about the 5 pees. Especially once a business progresses beyond the startup phase. While you may have been able to get away with winging it at the beginning of your business life, once your business grows, you need to take the time to plan, analyze and occasionally reorganize the way your business does business. Do you really think the 5-year plan you laid down as the basis for your startup is still valid 2-3 years later? Don’t find out the hard way that you missed the forest for the trees. I recommend you sit down with management at least twice a year to chart the direction your business is heading. To avoid this step is to flirt with disaster.
5. Can your business go on without you? Nobody should be indispensable in a business, not even the founders. If a business can’t go on without you, there’s no sense in calling it a business. It’s a job. If you’re going to hire and train capable people to work in your business, you also need to give them the opportunity to do their jobs without micromanaging their every move. You also have to give your employees a voice in the company. Far more important that monetary compensation is respect. If your staff feels it has no voice in how they do their jobs, then it won’t be long before they seek employment elsewhere. Even worse, if your staff feels overworked, underpaid and unappreciated, it won’t be long before they begin to undermine or even sabotage the business you have worked so hard to build.
Many CPA’s and CFO’s say that being in business is a lot like being in the Army. It’s either up or out. If you hope to keep your ship of business sailing smoothly ahead, realize that you need to face the facts that growth not only require the business to evolve, you also need to change the way you participate in the business. The most important question you need to ask yourself before you charge headlong to growing your business is, “How far are you willing to go when you need to grow?’
Ben Kinsey, CPA of Small Business Group works with owners of closely held corporations in the Northeast Florida region. If you work in the North Florida area we offer a FREE initial Consultation at our office, please contact Small Business Group if you would like to know more about strategies for your business.