When people come to me with problems that can only be fixed by making serious changes, I often wonder if it’s really worth it. For some, life in business can be relatively easy, especially if they are lucky enough to be a critical player in a niche market. However, many companies are literally hanging on the edge, just about surviving. And for them the decision to risk everything by investing further or to admit defeat and give up is never easy.
The first question I like to ask is ‘why?’ Why are you a director of your own business? What are your goals and do you honestly believe they can be achieved within the confines of the company you are responsible for?
Unless there’s a strong ‘why’, beyond just money, there really is no point. It might sound simplistic but in my opinion most businesses that were once good get into trouble for one, or more, of three main reasons:
- Their lucrative market became invaded with tough competitors
- They did not adapt to external trends in time
- The owners become bored and disinterested
For most of us, the solution to boredom is easily found by starting something new but what do you do with the business in trouble and the only solution is to risk everything? Personally I have come to the conclusion that there is no business worth risking your family home for. If your plan does not stack up to the scrutiny of external investors, then it is probably flawed.
My approach can be tough but I see loved ones as personal stakeholders. They not only need to offer their moral support but they also need to be prepared to adapt their life styles in line with the fortunes of the business.
But more than this, it is often our loved ones that see the bigger picture. Their witnessing of the daily stress their partners go through, should never be underestimated. Ultimately the decision to go ahead or stop should not be financially driven as emotionally driven. A good business needs a good financial plan, that’s basic but it also needs a good leadership team that can keep cool, think clearly and make high quality decisions time and time again. The simple truth is there are very few people that can do that day in day out alone.
Have good week,