Where Businesses Fail

When I began working at Allied Equipment we were walking a tight rope.  On one side, complacency, where businesses fail.  On the other, a brave new world full of risk and reward.

I’ve always been a student of business history.  I read biographies of successful business people.  I listen in on share holder calls.  I even read transcripts of business minutes when I can find them.  I love to study what makes businesses successful and what where businesses fail.

succeed in business

Moreover, I love success stories.  But not all businesses can write a success story.  Most businesses I’ve seen hit a point of critical mass, then fizzle into obscurity.  What makes a small business turn into a large success?  That moment on the tight rope.  This is where I see most businesses fail.

Inflection Point – They hit an inflection point and back off.  They get to the point where all employees and all finances are maxed out.  It is here that critical mass makes a leader feel nothing more can be done and they fail to make the moves that free them to lead.  The resulting lack of leadership will make businesses fail.

Avoiding Risk – They don’t take risk when it matters.  At Allied Equipment, we landed two jobs.  One gave us immediate cash, the other gave us cash flow. Leadership could have enjoyed the spoils and went home with a nice bonus, but we didn’t.  We threw it all back at the wall, even some borrowed funds.  It all stuck and our gamble paid off.

Dealing Only With The Now – There’s a wall one year in the future.  Unless you stop looking at the now and start building a ramp, you’re going to hit that wall.  This creates the two problems that follow and causes businesses to fail.

Failing to Learn – Businesses fail when they never stop to reflect.  They continue making bad decisions and waste resources.  They continue wasting man hours on low profitability work.  Learn to take the lumps and stop the bleeding.

Failing to Plan – Each percent of growth creates a new problem.  You must address them before they address you.  As our output grew I realized we were headed for max capacity.  I saw a point in the future where we could only produce enough goods to equal a profit less than our goal.  I had to find a new revenue stream and I had one year to do it.  That year made the difference and we were able to double revenues while increasing our impact on man hours by less than 2%.  Without a year to develop and put in place the resources needed to achieve this task, we would have fallen short of our growth goals.

We still have much work to do and many more challenges ahead.  Fortunately for us, we fell off the tight rope in the right direction.  We fell into a brave new world full of risk and reward.  We’ve reflected, planned, risked, and pushed against our workloads to expand and grow.  Busting the seems can be painful, but it is the only way to get out of the little box and into a bigger one.


What are you doing now that could cause you to fail to grow?

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JaysonFeltner.com - Christian, Husband, Father, Leader