When Entrepreneurs finally decide to live their dream and start their own business, it is understandable their financial goals are at the top of the list. Two of the top five reasons small businesses fail include poor accounting and cash flow management. However, according to the New York Times there is another top five reason businesses fail that has nothing to do with the financial piece of running a business, and focuses more on company operations. That is “out of control growth.”
If your business is operated poorly and does not respond well to the increase of business when it starts to receive an influx of customers and orders for your product or service, your business can easily fall into a downward spiral. An effective business plan should address these two concerns in depth in order to avoid the pitfalls that can essentially exterminate the business.
The most effective way to address the “growing too fast” issue is to develop and create effective processes and procedures throughout the business, from the accounting department to the business operations to ensure the company’s capacity and strength to handle such growth. This is the “how to” part of running an effective business. How is the business going to take in the orders for your products efficiently and effectively to ensure there are no errors? What is the onboarding process of receiving new clients? How will the company handle customer complaints? These are the kind of questions that should be asked when building processes around your business.
Commit to a process, not a goal. Success does not come from stated goals alone, but from the processes implemented to achieve those goals. They are also long-term in nature and will surpass any goal achieved. Thus, after your goal is realized, the process is still in place to continue moving the company forward toward continued success and achievement of future goals.
Every company and industry is different, but the concept is the same. Working with the right people to develop and implement smooth effective processes will not only keep your business alive, but allow the company to achieve its highest potential.
To plan, develop, and implement effective processes, the owner of the business must have the humility to stand out of the way and recognize that bringing in qualified people is key to helping them develop and implement such processes. Be wise and use their expertise to make the company stronger to confront market growth and the demands from the customers, while minimizing the risk for embezzlement or fraud.