The Biggest Business Busters (10 factors that can scuttle your business)

By Diane Tait

Image courtesy flickr

Being a business owner myself, I am always cognizant of trying to stay ahead of the curve by working on my business as much as I work in it.  One of the things that stifles the development of many small businesses is blundering into a problem that can scuttle the ship of commerce before it ever reaches deep water.  By that, I mean that there are a number of potentially catastrophic problems that can crop up that are capable of slowing or stopping a business in its tracks.  Here are ten business busters all business owners need to avoid:

1.      Can your business work without you? - The first problem many small business owners have is they really have a job instead of a business.  That not only leaves them in a vulnerable position when it comes to the competition, it also means they find it extremely hard to take time off from their business, which can lead to burnout.  Burnout in turn leads to a lack of enthusiasm about the business, which is a quick way to sink any business.

     

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2.      Whose side are your employees on? – Even if you’ve grown your business to the point where you can rely on others to take some of the strain off your shoulders, you have to be vigilant when you hand the reins to employees.  Let the wrong person drive the bus and they could easily drive it and you over a cliff.  Disgruntled employees can be more destructive to a business than a wily competitor.  Another employee vulnerability is anyone in the business other than the owner who is critical to the success of a business.  Many businesses have found themselves on the rocks when a key employee died, retired or was wooed away by the competition.

      3.      Outsourcing can be a two-edged sword – One of the wonders of the modern world is being able to outsource items that previously required a larger staff to handle.  Today you can outsource everything from bookkeeping and IT solutions, to copy-writing and even executive functions.  The trick when using outsourcing is to make sure that those you rely on to provide services are reliable, stable and prompt.  You want to be wary about outsourcing your tasks overseas, since it’s extremely difficult to seek satisfaction from another country if something goes wrong.  Also, beware of allowing anyone to have access to your financials or critical data, since loss of either of these can topple all your dominoes in a hurry.

Image courtesy PxHere

      4.      Technology is not always your friend – Just as with outsourcing, there are two-sides to technology.  While things like word processors, spreadsheets and the Internet have revolutionized the way we do business today, there is a dark underbelly of tech that can undermine even large conglomerates.  What I’m talking about is hacking and cybercrime.  You’ve no doubt read about multinational corporations who have had millions of records stolen by hackers.  What you probably haven’t heard about are the thousands of small businesses who have either had their data stolen or opened up their office only to find ransom demands on their computers.  What most business owners don’t realize is if your computers and/or servers are breached by hackers, not only can your business be shut down, but your clients can sue you for losing their data.  The two best ways to avoid this techno-turkey is to make sure you have an IT professional analyze your cybersecurity regularly and consider looking into acquiring cyber insurance that can help your business weather the storm should your systems be hacked.

      5.      Are you selling yourself short? – Nobody wants to sell themselves short, but that’s exactly what many business owners do.  They either try to compete on price alone, or they fail to raise their prices sufficiently as time goes on.  While offering a low price is one way to get people to do business with you, if you continue to low-ball bids, this strategy can wind up costing you big down the line.  I don’t know about you, but as a business owner, the most important factor to staying in business isn’t cash-flow.  It’s profits.  There are many failed businesses out there who had wonderful sales figures only to go out of business because they failed to turn a profit. 

      6.      Are you selling yourself into oblivion? – The two hardest things for any business to do is to get customers to buy from them and then get those same customers back to buy again.  Since one of the things that cost businesses the most is to acquire new customers, you’d think that business owners would move heaven and earth to entice customers to buy more products and services more often.  Ask yourself this question, “When was the last time I took the time to engage my existing customers?” 

     

Image courtesy Pixabay

7.      Do all your clients pay promptly? – Obviously, the single most thing anyone in business can do is to make sure they get paid.  Yet many businesses give clients way too much latitude when it comes to how long it takes to pay.  This includes slow-pays and no-pays which can result in a cash-flow crisis that could undermine any business.  If your business has found clients who are routinely slow to pay, it’s time to initiate penalties that will urge clients to pay on time or pay more if they’re late.

      8.      Is your company ill-prepared for success? – While every company strives to grow, what many find out is they are sometimes ill-equipped to take on a quantum leap in clients.  That’s because what works at the early stages of business doesn’t always translate should a business become wildly popular.  Before you find yourself handling a situation where you’re forced to deal with too much of a good thing, make sure you have laid out a plan that takes into account the steps you need to take should your business experience a sudden influx of sales.

      9.      How much of a hit can your company take? – Just as many small businesses have difficulty dealing with success, what’s even more prevalent is for them to be caught flat-footed should they be forced to take a hit.  There are many ways in which a business can suddenly find itself in a financially perilous situation.  Economic downturns, seasonal variation or a lawsuit can catch a company with its pants down.  Even things like sudden supply-side spikes that cause prices for goods to skyrocket, or a shortage of parts or material has been known to bring many small businesses to their knees.  Instead of being caught unawares by such anomalies, what smart business owners do is to make sure they have both a contingency plan to deal with possible calamities, plus a healthy credit line that can assure the company can weather the storm without going down with the ship.

      10.  Nobody is perfect – But that doesn’t mean that business owners and managers don’t sometimes hold up the launch of a product or service because they seek perfection.  If you’ve ever purchased software, you’ll have noticed that there is always a version number included.  That’s because software evolves and is expected to be updated and augmented as time goes by.  That’s not to say that you should launch a product or service that has obvious defects. You just don’t want to wait too long to go to market or you might find the competition has beaten you to the punch.

Diane Tait owns and operates A&B Insurance.  To find out more about how you can save money on boat insurance, go to hersite or fill out the form at right.