Is Your Successful Business in the 1st Stage of Business Failure, and You Don’t Know It? Read to know how to check it…
Starting a business is a very tough job. But then, after many years of extra ordinary hard work, you push your competitors or you build a new virgin market, and finally you are no longer struggling! You have become a reputed player in the market, you have loyal customers, and you are making profits. In fact, you start to make enough profits that “make you happy and complacent”. Now, after all the years of hard work, it is natural but dangerous to be complacent. Why? Because the market is dynamic, it’s changing always. The customer tastes are changing, they become more demanding, and there’s always a new player who comes with something new that your customers might fall in love with! And that’s why it’s dangerous to be complacent. As you know, “complacency” is that feeling among businessmen that “this is enough… we are “satisfied”….customers trust us so much that our competitors will not steal our customers…our quality is superior… and worst “we don’t have a competition!” mentality.
Now complacency leads to guaranteed business failure. When it will fail is just a matter to time.
Now Failure was 5 stages according to JIM COLLINS, the author of “How The Mighty Fall & Why Some Companies Never Give In”. He states the 5 stages as;
1st Stage: This stage is when the businessman becomes arrogant with his success and/or when he believes that he is successful because “of what he does”, rather than the reason “why he is doing it and in what conditions it will work or not work”. In the former case, he will not change what he is doing (it can be a product that refuses to evolve with customer preference changes, or a service that refuses to update itself to what competitors are doing), just because it has worked for some time (past success, without considering the future). So how do you know if you are in this stage? Ask yourself,
· Do I know my competitors? Make a list of them, or better make a table
· Do I know what services are they providing? Which of those of services are different from mine? Better than mine? Worse than Mine? Add these data to the “Competitors Table”
· Do I know how much they charge from customers? Add these figures into your table.
· Do I know how much business they do? This is tricky to get, but crack your head to get it. Add the findings to your “table”.
· Do you really know who your customer should be? Most businesses don’t! Since not all human beings are born to be your target customers, learn what kind of customers prefer the kind of products/services you sell. This is called Customer Segmentation.
· Ask your customers if they are happy with your service? Or is it fading? Is something making them think twice? Make another table to list the points that your customers like about you and dislike about you. Highlight the points that customers like in you in your ads and PR campaigns; and try to improve the areas that the customers dislike, even if it is something small
· Find potential customers, via survey or other activities, who are not using your products/services (but using your competitors), and ask why they prefer them over you? Note those points to the Competitor table
· Ask your staff if they are happy working in your company? Are they satisfied with the management actions? Do they think there are better ways for the company to perform? This is because; business success is a result of the staff performance. If they are good and dedicated there is success. If they are not, business will fail. If they feel there is no growth opportunity, no challenges, no thrills, if so then they will either resign or join your competitors or they will sulk and get spoilt. Always note, it’s the good talented staff that resigns (because he wants more action, more benefits and there is someone out there willing to give it to him), while the useless staff, they stick around like a pasted paper (because they know they don’t add any value to any post, and hence nobody will hire them).
· What’s happening in your industry? Do you read news about where your industry is moving? Is there a Govt regulation or policy that is going to trouble you? Is there a new technology in the making that can cause disruption in your industry, changing either the manufacturing process, or quality standards or completing deleting that product from the market? This is a very scary part. These are about macro aspects, things that are beyond your control. But you have to know it to be better prepared. How can you know? Subscribe to industry magazines/journals or online publications, continuous online research, watch relevant YouTube vids etc. What happens when you know? If it’s a good change going to come, be prepared to accept it and make best use of it months or years in advance. If it’s a bad news, do all steps to reduce that risk. Or if it’s an industry destroying trend, plan about diversifying into other streams before the Tsunami comes.
These are just some questions to think about, to know if you are in the first stage of failure. If you are then take a reverse turn, correct all your mistakes, and steer away from potential failure.
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