Business Problems And Mistakes – Understand & Solve

If your business is stuck and your performance has stalled in terms of sales and profit, or worse if things have turned down, you need to take action.

The first thing to ask is…

Do You Know Why Your Business Is Stuck?

In detail? Meaning you have identified specific causes?

Or have you made an assumption based on gut instinct. If so, beware. These attributions are often wrong.

Do You Know What To Do And How To Do It?

For change to happen, you need three things:

• To know what to do.
• To know how to do it.
• To have the commitment to take the necessary actions.

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Right from the start of my career, I’ve been fascinated by the idea of helping turn around businesses in trouble. When I was being interviewed as a trainee accountant in 1981, I expressed interest in the firms’ business recovery departments.

My career as an employee had its share of highs and lows. I was seconded to a start-up company in a group and had the true “cradle-to-grave” experience as I eventually closed it and sold off the assets. I was also the Finance Director of a business that found itself caught in a savage price war and I’ve never seen profit drain away from a business so quickly.

When I had to write a dissertation for my MBA, it seemed obvious to choose a topic that looked at how small businesses in financial difficulty might be rescued before collapse. It involved extensive research into the causes of failure and how businesses can achieve turnaround and I really threw myself into it. So much so that I had to ask for a six month extension. When finished, the dissertation was received a Grade A Distinction, which meant it qualified to be permanently bound and placed into the Manchester Business School library.

I’m telling you this because one of the interesting things thrown up by my research was the issue of causal attribution and how business managers and owners deceived themselves, at the risk of the future survival of the business.

Let’s have a look at what I discovered. [continue reading…]

When you have a problem as a business owner, it’s very easy to feel unsure about what you need to do next to improve your business.

You feel stuck (see symptoms of being stuck) and it’s hard to get unstuck on your own.

Quite simply, you’re too close to see things objectively.

This makes it hard to move from the symptoms to the underlying problem so the temptation is to try to cure the symptoms again and again.

It’s like playing whack-a-mole. [continue reading…]

Sometimes you know you’re stuck because you have a problem going around and around in your head without reaching an answer. Other times, you or your business might suffer from some of these symptoms:

1. You’ve lost the feel good factor of being your own boss.
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2. You feel conflicted about your business, as if you’re being pulled in at least two directions at the same time..
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3. Profitability is lower than you want.
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4. Cash flow issues regularly arise like being paid late by customers or having to fend off suppliers who want to be paid before you’ve got the money.
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5. You get to the end of the day and feel as if you’ve acquired more new jobs to do than you’ve completed in the last ten or twelve hours.
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6. Your employees seem to create more problems than they solve. Morale is down and you might have lost or be in danger of losing your best employees.
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7. You know your customers are disgruntled because you can’t give them the service they demand and you want to give.
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8. You’re unsure where you should focus the time you do have for business improvement in the future.
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9. Customers continually encourage you to cut prices just to keep their business, let alone increase it. You’ve lost ground on the factors that used to make your business attractive to customers because it was different from your competitors.

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The full title of this book by Mark Blayney is

“Turning a Business Around: How to Spot the Warning Signs and Ensure a Business Stays Healthy“.

In my review posted on Amazon.co.uk , I gave this book Five Stars. This means I think it is Excellent and it is Very Highly Recommended.

Here is my book review.

An easy to read guide for owners/managers of businesses in trouble

This is a very good book if you ever find yourself in the scary and stressful situation of owning or managing a business in financial distress or you fear that the business is heading that way.

In the preface Mark Blayney sets two main purposes for the book:

1. To act as a fire extinguisher for a business already in a crisis.
2. To act as a smoke detector to help identify the early warning signs while there is time to correct the problems. [continue reading…]

Insolvency is one of those words that’s thrown around but you may not know what it really means.

In UK company law, there are two tests to decide if a company is insolvent:

1. The cash flow test – the business is unable to pay its debts as they fall due.
2. The balance sheet test – the value of the liabilities is greater than the value of the assets.

See http://www.lawplainandsimple.com/legal-guides/article/what-does-insolvency-mean

These tests are very demanding on the face of it. What business pays all its debts on the due date?

In practice, a company is deemed unable to pay its debts if:

1. A court order or judgement hasn’t been paid.
2. One of your creditors, who is owed more than £750, has served a formal demand for an undisputed debt at the registered office and the debt isn’t paid within three weeks.

You can find more details here http://www.companyrescue.co.uk/company-rescue/guides/insolvency-test

Warning – I’m not a lawyer. Please take appropriate professional advice if you believe your business may be insolvent. There are important consequences for the directors.

Get To Know Me

[sos]

[6Steps]

I’ve designed my business to help business owners who are struggling.

That begs the question…

“What is a struggling business?”

It’s one that is performing at a level below the business owners realistic expectations and desires.

The business owner (and his or her family) is having to make sacrifices in the way they live their lives. [continue reading…]

My aim is to help you to survive in business and then to prosper.

Mere survival isn’t good enough for the longer term.

But to do that, sometimes we need to look at what happens if a business doesn’t survive but fails.

What happens when a business isn’t a viable going concern?

The Often Quoted Business Failure Statistics

I see a number of different statistics quoted but rarely with their source.

Things like

“80% of new businesses will fail in the first five years.”

I’ve even seen this quoted as within two years. Of course it is in the interests of business experts to scare you into buying their advice and training. [continue reading…]

How do you know if there is a problem in a business?

The Two Big Symptoms That Indicate Serious Problems In A Business

The two main symptoms:

• Profitability Is Bad
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  If your business is making little profit or losing money, there is clearly one or more underlying problems in the business and they need to be fixed.
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  If this is a problem for you, you should look at my Quick Profits Coaching service.
  >>> http://businessdevelopmentadvice.com/blog/my-services/quick-profit-coach/
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• Cash Flow Is Bad [continue reading…]