When is Business Failure NOT business failure?

Insolvency for DummiesThe answer is, when you are brave enough to ask the hard questions, the courage to find honest answers and then act on those answers.

Your business is the vehicle to achieve your goals in life whatever they may be. When you lose sight of those goals and the business becomes the goal in itself, it is only a matter of time before the passion which propelled you into business begins to disappear.

There are only two things certain in a business, change and taxes. As circumstances change in your business, in its current form, is it still the right vehicle to achieve your goals?

Remember your first car? No matter how well it was maintained it would be unlikely to continue to meet your needs as your life changed with a family, career and personal interests. Also, changing external factors will have an impact on the suitability of that first car. These include technology, government safety and environmental regulations.

You can continue to upgrade the components of that first car but you reach a point where the costs exceed the benefits in the longer term. It is then time to dispose of the vehicle in a way to maximise its value and start afresh.

The same applies with the vehicle of your business. If your business no longer effectively helps you achieve your goals because your goals have changed or the situation in which your business operates has fundamentally changed, then it is time to look at changing vehicles.

All this can be wrapped up in a single word, strategy. We can all use some help in knowing what questions to ask and to find and test the answers to those questions.

  1. What do I want my life to look like in 5 and ten years’ time?
  2. How does my family feature in these visions?
  3. Will my business help me realise these visions or is it holding me back?
  4. When I get up in the morning, what do I look forward to working on or in my business?
  5. What is the problem that my product or service solves for my customers? For example if you are a restaurant are you providing meals or a social experience?
  6. If the customers or clients, including other businesses for the B2B market, could not access my product or service from me or a competitor, could they easily substitute another different product or service to deal with their need? For instance, if business travel was no longer available is video-conferencing a substitute?
  7. What impact has technology had or will have on my product or service? Can you think of some services that were around only just a few years ago, but are now gone? Remember dropping your camera film to be developed?, or having to avoid bike couriers in heavy traffic?
  8. How easy is it for others to enter my market? For example, the development of cloud accounting now means the local bookkeeper and accountant have competition from data processing centres in places like India.
  9. Am I responding to changes within my consumer market and trends? These can be brought about by changes in values and education, for example towards living a healthier lifestyle, or demographics such as an aging population.

When you have answered questions such as these, you then have to then ask yourself can my business adapt or are the costs of adaption just too high for the return? If they are too high, financially or personally, then it is time to move on.

Changing strategy is not a failure. It is adapting and growing, in other words evolving. If you don’t evolve it is likely the chances of meeting you goals, whatever they may be, will become extinct.