The road to business success rarely follows a straight route. Curves, detours and roadblocks constantly challenge an owner’s navigational skills.
The astute owner will religiously monitor the internal and external signs pointing toward the need to make radical shifts to keep the business vital.
Overseeing increasing or decreasing sales and profits is often the least effective method for determining the long-term success of a business. There are other, sometimes subtle, changes that yield valuable information upon which to base decisions — furnishing opportunities for action before the bottom falls out of a company. Here are five areas to watch:
1. Increasing competition.
In a rapidly changing business and economic sector, competition is fierce. Finding and studying the competition is imperative — particularly if the market is flooded. Repositioning the business, either through marketing efforts or upgraded products and service demands a decisive shift.
One of my coaching clients once owned the only professional business service of its kind in the area. For years, there was no competition. With the advent of technology, a developing business community and the arrival of new competition, however, he realized the need for change.
He quickly updated antiquated software and added services and staff to keep clients and add new ones. During the busiest season of the year, business nearly doubled — despite a new competitor in the area.
2. Long-term clients taking their business elsewhere.
Informed consumers are looking for great deals and value-added services. Establishing client surveys and analyzing and applying the results in your business model will help ensure that existing clients not only remain loyal, but provide referrals.
3. A market disappearing.
What was once considered a viable product or service may no longer exist. If consumers are not purchasing widgets anymore, why try to sell them? Instead, explore creating new lines, merging with another business or closing down.
4. Employees resigning.
Are they accepting offers from competitors? What type of company lured them away? What factors caused them to leave?
Conducting exit interviews to find out why staff is leaving provides feedback for reviewing your hiring and retention practices.
5. The owner’s personal interest in the business.
After several years at the helm, the owner may realize he or she is consistently waking up dreading the day ahead. The fun and excitement of running the business — even a highly successful one — is gone. This is a surefire recipe for business disaster.
Taking stock of the mission and vision of a company by the owner is paramount in determining a course of action. Is it possible for the owner to take a sabbatical and return refreshed and full of new ideas? Or is it time to relinquish ownership?
Granted, variations in sales and profits are vital indicators of a company’s health. It is important to determine what causes such fluctuations in order to evaluate trends and market conditions. But resting on financial laurels alone, while ignoring other signs, may ultimately force a company to make decisions from a reactive instead of proactive position.
As a client once said, “If it’s in front of me, I can deal with it. What I’m not seeing can cost me dearly.” Nancy Duffee ([email protected]) is a professional coach, workshop facilitator and owner of Integrated Solutions in Central Ohio.
