There must be fifty ways to kill your business.With apologies to Paul Simon
Tuesday, 3 June 2014
Billy’s Twenty-Third Law: Up is hard and slow…Down is fast and easy!
If you are like most entrepreneurs, at least most successful entrepreneurs, you have devoted time, effort and money to build your business. I know a few people whose businesses were successful very quickly, but I have never met an entrepreneur who didn’t work hard while building the business. Building a business is tough. It's like riding a bike up hill...slow, hard and painful!
Screwing-up is remarkably easy! If you have read many of my ‘business laws’, you will quickly notice that there is a split between things you should do and things you should avoid. If you have any brains at all, take the laws telling you what to do with a grain of salt. I’m just not that smart. However, take everything I have written on what not to do and take them to heart!
When things begin to go downhill, they tend to accelerate. One year things are looking good, and the next you have lost a key client, have a collections problem and key people quit. In my experience it is usually that toxic concentration of several things happening simultaneously. Friends of mine manufactured clothing. They had a supply disruption caused by the weather in Eastern Canada together with a bad debt. They couldn’t recover financially and their successful business was out of business within just a few months.
Big companies have the same problems. Blockbuster went from a single outlet in 1985 to over 6,000 outlets at the beginning of 2010 to bankrupt in 2014. What’s interesting is that they in 2000 they had the opportunity to purchase Netflix! (IBM had an opportunity to buy a substantial portion of Microsoft but turned that down as well!)
Hindsight is easy, but it goes to show you just how quickly things can go wrong and go wrong badly. Dr. Theodore Levitt wrote a seminal article in the Harvard Business Review called Marketing Myopia. In the article, Dr. Levitt asks the question “What Business are you Really In?” His example came from the turn of the last century with railroads. They thought they were in the rail business…not in the transportation business. They ignored the threat posed by long-haul trucking at their peril. The Blockbuster story was so similar…they thought they were in the rental business not in the entertainment business. I know the internet has changed business, but the principles of business do not change. Applications change, speed really changes but the concepts are true.
Over the next few weeks, I want to present some blogs on ‘minding the store’. How do you play good defence, while at the same time generating offence or growth? I want to look at some of the big mistakes made by businesses and some of the ways you can mitigate those errors. We can call the next few weeks...Quit Messing Up Your Business!