Some entrepreneurs are very stubborn and like ostriches they stick their heads in the sand when things go wrong.
A good illustration is a couple who owned a manufacturing business during the good years in 2003-7. When the economy turned down in 2008 their business slowed. Many competitors left town but the couple continued to believe that the upturn must be just around the corner.
They did not realize that this business climate is the new normal. The last great worldwide depression took a decade and a World War to turn around.
As a result, they did not cut operating costs and the profitability of their business gradually eroded into a deeper gorge of debt until it became a losing operation. Rent got behind, the suppliers were not paid and equipment leases fell into arrears.
When the bailiffs arrived at the door, the husband finally asked for advice from Floodlight. By the time we arrived, the business was living hand to mouth, the marriage was coming apart and the family home was on the point of being lost.
Six months beforehand the warning signs were urgently flashing red!!!
- The owner was spending time not selling but instead collecting money and cutting last minute cheques to suppliers. Sales were still trending downward.
- Phone calls from potential customers went unanswered because the call might have been a creditor.
- The worst days of the month were the 15th and 30th because payroll was due.
- Machinery was broken, vehicles were well past their service due dates and there was no money to pay for the work.
- The company desperately wanted a big order to get them out of trouble but if the order appeared suddenly on the desk, the company could afford not to buy materials.
- The owner’s credit cards were approaching the maximum and the company bumped the limit on the operating line every week.
- The bank was asking for frequent financial updates which took time away from selling.
- Liabilities climbed each month and assets eroded away, but no one knew because the financials were months behind.
- In our experience at Floodlight we run into many entrepreneurs who feel they are alone. A manufacturer certainly cannot ask for help from another manufacturer who would know the answers. And asking for help from a family member or close friend takes a lot of inner strength and admission of failure.
Business help books are about the big boys’ ( GE and DuPont) best practices. A quick review on the internet will call up hundreds if not thousands articles that help… a bit- but with no integrated approach.
The purpose of this article is to encourage business owners to take action
- If you see yourself in our example, call in the cavalry sooner than later and ask for help.
- It is less painful and cheaper to get help early on at the first sign of a speed bump instead of the hiding your head in a huge chasm like the Grand Canyon.
- But please do something – even an ostrich has defied evolution and found a way to survive and so can you
- You just need to ask for help from a qualified source like a Business Coach or specialized Business consultant!!!
At Floodlight, we help you build your business by illuminating the dark corners of your business and to expose things that you don’t always look at closely enough.
Our goal is to help you find a solution, maximize your results, build profits and achieve a greater work-life balance.
Stay tune for our next article on how we helped this owner with their business turnaround.