Why Your Business Is Not In A Growth State And Could Be Failing - 5 Problems & Solutions

You created a business to provide value to your customers and so you can grow and scale. You have amazing, innovative ideas for consulting services, virtual programs or products. You start creating; you get stuck in the weeds and as a result - no business growth and/or failure.

That is one of the bigger first problems for business owners. They are "too busy" working IN their business instead of working ON their business.

Problem #1 - I'm the boss - This Is My business And It's Built Around ME - One of the first problems I notice when working with organizations is that business owners try to build the business around themselves. Being involved in every single task and approving every expense, executing every task manually - no systems in place and no processes – walking around controlling everything - do this do that and try to be in every single meeting and need to control everything.

SOLUTION: Remove yourself. Gain your time back. Develop some freedom. Instead of being the boss – lead yourself and your employees – develop a vision and communicate.

Problem #2 - No Financial Awareness (No KPI's, No High Level Reports, No Clarity in Numbers) 98% of business owners are not aware - As mentioned above - owners of businesses are involved in every activity and transaction inside the business such as providing services, creating social media posts, paying company expenses, dealing with employees & clients and being in every meeting and going home miserable at the end of the day. Why become the jack of all trades? Jacks of all trades are only 20% efficient in every trade, if at all. So, a few questions come up; When will they have the time to become aware of their business performance? When will they understand their current year numbers? When will they project business growth?

You must analyze and gain confidence in your business numbers for a few reasons.

1.     So, shit doesn't hit the fan and you have a plan of action for unexpected events.

2.     You can see exactly how a new set of products or services, employee salary, a vendor cost, new client win or loss, a new office or franchise affects your overall monthly and yearly profits and margins.

3.     Analysis and KPI’s prepare and enable you to make your next decisions for process improvement, setting goals, and executing on growth initiatives.

4.     Communication – It’s important to communicate KPI’s and your why’s to yourself as well as your team or employees. It’s also important to communicate business growth plans to your team, any interested parties or a bank. Trust and credibility in your business is important.

SOLUTION: Start developing high level KPI's and reports on the performance of your business, employee production and how your expenses are affecting the bottom line for every month and full year. You can only manage what you measure. Consistency is key here.

Problem #3 - Not Hiring or Hiring Wrong Individuals – Hiring, onboarding and training requires time. Production, sales and employees that can take care of your day-to-day tasks and get you the numbers that you need on a consistent basis. If you are too busy doing other things you don't have time to hire employees and if you do get "a minute" you may hire the wrong individual because you did not take the time to explore your options, onboard properly and create processes for the new employees to follow.

SOLUTION: Start hiring and start hiring the correct individuals for your business. Don't view them as a cost - rather as an opportunity to free up your time and delegate so you can concentrate on the growth of your business.

Problem #4 - No Systems And/or Processes in Place - Here I want you to think of this one simple situation. For example – say you are a gym or salon owner and you have a front desk that is well trained by you and does his or her job well. Then comes a time when they suddenly decide to leave. You onboard another front desk person or you delegate this position to someone else. Guess what? You have to train them again or you have to pay someone to train. At least on tasks that are complicated. What about the rest of the redundant tasks like process for when a costumer comes in? How to welcome them, what to tell them, what kind of coffee to make, how to upsell them on the way out, how to use a certain program on your computer, where certain files are, who to send them out to? Who will answer all of these questions and be next to the employee? What about money you are paying the new employee while they are training? There are many more tasks inside your business I am sure.

SOLUTION: Write out processes (google docs is great) for everything that is done inside your organization – even a high level process (yes this takes some time) – BUT this will save you a ton of time and money that you have to spend on someone or yourself to train them. All you have to do is pass the folder or link on your google drive to them. Obviously, the new employee will have some questions (with which you can update your processes as you go along) but that's the key to free yourself. A great way to accomplish this is to have everyone in your business currently working in a position (or department heads) to take some time and write out processes on what they do. This doesn't have to be right away - it can take 1-3 months to implement little by little - but you are developing a system that will automate your business and keep yourself as the owner and everyone aligned on their roles. This will also identify gaps on why employees are under performing. Once implemented - the system will work on autopilot and will reduce costs/mistakes and increase profit.

Problem #5 - Not Setting Financial Goals and Not Planning Financial Growth - We know that the majority of small businesses fail within the first five years. A recent study by U.S. bank found out that 82% of the time business failure occurs because of poor short- and long-term financial planning and/or poor cash-flow management. Even if you are doubling or tripling your sales - there is a big chance you may go broke. Just focusing on revenue growth is a big misconception. Believe it or not - there can be many problems hidden in your revenue growing solutions. Cash-flow problems must be addressed by categorizing spending, develop realistic benchmarks and micromanaging your spending. Remember every dollar you spend is decreasing the value of your margins. The MOST IMPORTANT rule here IS TO FORECAST. Forecast your revenue, forecast your spending, forecast your margins. A detailed forecast will make sure you accelerate and accomplish the sustainable growth you are gearing towards. Benchmarking, developing KPI’s to knowing how to allocate cash from debt financing – a forecast will help you to stop guessing and put your business on a path of strategic development. You need to invest in your team, inventory, tools, ideas and projects – and you will achieve this by having extra cash. And to have extra cash – you have to PLAN – not plan in your head but have consistent WRITTEN monthly and yearly budget and forecast.

SOLUTION: Develop a budget. Create a forecast. Understand how much cash you have in the bank monthly and yearly – THIS IS A MUST.

If you are looking at your bank account twice a month (hesitantly) and not having enough take home cash at the end of the month – remember the main reason for this is that you are not creating budgets or forecasts. And it’s REALLY difficult and stressful to grow your business.

Focus on important things to grow your business. Looking at your business from outside the box or from a “birds view” will give you a much broader perspective on your business health. Hire, delegate and get your time and energy back and apply that energy to growing your business. Yes, delegating is hard and scary because it’s your processes that you may own – but it’s time for a change. Get out of the comfort level and being uncomfortable is what paves our way to growth and success.

In reality, you created a business and it’s your duty to make it grow but the only way you will step into the growth state is if you have financial awareness of your real business numbers and analyzed figures, to arm you, before you make current or future decisions.

Let me open up a little secret for you and give you some free money...did you know that you actually drive & increase the value of your business significantly by continuously having financial planning in place? You will be able to franchise your business or sell it at much higher price, much faster and easier. I constantly see businesses franchising and selling for twenty to forty five percent more because they are able to showcase their buyer with a more accurate picture of historical as well as projected income & expenses. I don’t know about you, I’d rather deal with someone who can show me past business performance, analysis, and proof.

I hope this information gave you some value and insight. If you do have any questions – feel free to send me a direct message or visit www.finance-driven.com – let’s set up a free strategy call and chat and I’ll help you get unstuck and rewire your thinking – so you can start transforming your business and pave your way to growth and success. Your mindset is only hold you back from changing your business.

“When business performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates” – Thomas Monson

Best,

Yuri Mavashev