Imagine a plane spiralling out of control. Each seat is a new business that will be starting in this year.
BAM! BAM! 50% of the passengers die instantly.
What happens to the survivors? Some swim to life rafts. Others are still walking, uncertain about their future. Just barely surviving.
Do you find this familiar?
It should. Statistics show that half of all new businesses fail within their first year. This may seem like a promising picture, but it’s important that you remember that survival doesn’t always mean thriving.
Even a great business can look good “by the numbers”. However, the owner of a business can find things extremely stressful.
Why (and how) do some businesses succeed while others fail? I have seen the same 3 mistakes over and over in dozens of businesses. These mistakes are common, so get on top of it!
1. Your data is not yours!
It is perplexing to see how many business owners don’t know what’s going on in their companies. They don’t know how much a product, job or other item might cost them. It’s like a house made of cards. I believe it’s, and most likely’s.
A recent client of mine believed their product/service cost three times as much as it actually did. It’s three times more!
When in fact, we don’t really know the answer to these questions, we think we are smart enough to be able to solve them.
Studies show that our ability to correctly estimate proper numbers is quite poor.
You don’t believe me? You can estimate how much you have spent on food, for example, this week. Next, compare your bank statements. You will be amazed at the results.
Studies by health experts also reveal that people trying to lose weight eat far more than they should. Contrary to popular belief, people who are trying to lose weight tend overestimate the amount of food they eat.
It has been repeatedly proven that humans aren’t good at estimating things.
This is okay because there are simple ways to fix it.
Write down everything. You should keep a detailed record of what you are trying to discover.
You will soon become addicted to the positive results you see if you make this a daily habit.
It doesn’t need to be difficult! It doesn’t have to be complicated!
It’s as easy as writing it down. You can write it on a piece of paper that you have with you. You can also have it on your phone. Get a true, accurate, and complete overview of your company’s statistics. It’s your right to understand what is really happening under the hood.
2. All your time is taken up by problems
This is a difficult one. You owe your bills. Payroll is coming. “Problems”, a really annoying person, keeps coming up to you every morning ready to greet you at the door.
Soon enough, you find yourself stuck in the back dealing with many issues, just like most of the surviving businesses. It’s impossible to think about the future of your business or even steer the ship.
Perhaps your original goals of growing and getting ahead might no longer be possible. Instead, you will have to focus on paying your bills and making it through the month.
It’s difficult, but it has to change.
If you are also facing this issue, the answer to #1 (not looking at statistics) will be particularly relevant.
It is possible to see a lot more clearly and quickly once you start looking at your business from a numbers perspective.
You will be able to hear the data and know what to do. Your company has already been a success. It is possible to solve any problems that you face going forward. You have to be committed to solving them and doing the research before you can find the solution.
Let’s take a look at this quote from a man who excels at solving problems.
“Most people waste more energy trying to solve problems than they do going around solving them.”
What does it actually mean?
Many companies turn into a monster and push their owners around like a dog eating homework. They steal their lives and eat profits (just like a dog who eats homework). Or something. (I’m certain there is an analogy somewhere.)
Instead of reacting to these problems, solve them. The first step in solving the problem is to fully examine it. Look beyond the symptoms. Take a look at the root cause of the problem. Data is the evidence that will lead you home.
That was Henry Ford.
3. Optimizing is not the goal.
The other day, I was having a conversation with a friend. He wanted to know why athletes and sports teams use coaches.
“They’ll totally destroy their coaches head to head, what can they take from them!” He resisted.
You’re most likely on my side, but you don’t know that. We understand why athletes need coaches. It’s simple. It’s simple. Coaches can optimize athletes and teams, and get them the best result on the court.
Teams and athletes should strive to improve. They should strive to do so.
It’s been odd to me that different companies take the opposite stance.
Our military is constantly in training, trying to find better and more effective ways to defeat the opposition. Sport teams are always learning new ways to improve certain aspects of their game.
Businesses? Businesses just keep doing the same thing over and over.
Moreover, the same thing they started at the beginning may not have been optimized later.
Most companies will copy the best practices of their industry. It makes sense at the surface. It’s a successful business model.
It’s kind of.
It looks like this, according to what I have seen:
Think about what it would be like to run a marathon. You’re #50. You can see #48 in front. What do you do? You do what he is doing.
This is obviously a great idea. You are going to be a role model for someone who is already ahead of you.
Why not put the same effort and energy into modeling the man who is #1? Or #5.
Their systems, procedures and methods of doing business will help you far more than the guy at #48.
This is something very few companies do, but it allows them to grow up to 50%, 100% or more quickly.
Optimizing means getting more out of what you already do .
Optimizing a TV ad campaign costing $20,000.00 is not optimization. This is marketing.
Optimizing is the best way to make 10, 20, 50 or 200% more money from what you already do.
How can you optimize your business?
You’re sure to have guessed it! Take a look at your data!
You hate me for saying it. I am sorry. Here, all roads lead to Rome.
90% of business problems can be solved by tracking data, looking at numbers and then improving them.
Business owners often don’t know what questions to ask. This is a problem that can be very unique to your company. Spend some time pondering over each statistic that will help your company. What is important? What is important?
Start asking great questions and you will start to get great results.
Take a look at every process in your company and find ways to improve them. Although optimization can be tedious, I am certain you will be hooked once you see the results.
It is worth your time to figure out stats for your business. Take it slow. It is rare to see dramatic changes that can be sustained. It should be done for at least 15 minutes each day. Next, take 30 minutes. You will be amazed at how much you can learn about your business.
Doctors cannot save your life if they don’t look inside and examine your stats to find the problem.
How could it be different to save your company and help it prosper?
We hope this helps!
Be First to Comment