Top 10 Reasons Businesses Fail Number 2 – Out of Control Growth
Wow, I thought growth was good for the business? Obviously you are not in business to be stagnant. The goal of most businesses is to grow. But often in our blind ambition, we are too eager to grow. Sometimes it is necessary to put the brakes on and slow down in preparation for that desired growth. Anyone who knows anything about construction will tell you that the strength and the stability of a structure is only as strong as its foundation. If the foundation is not solid, the building will crumble. Your business is the same as building a house. If the foundation is strong, you can add rooms on the second floor, then on the third, etc.
As the business grows, systems and controls that are not well defined and automatic cause chaos and disconnect in the business. So what kinds of things should you do have a solid foundation? Our website lists some of the many items you should consider when starting business. Some of them are:
1. Write an operating agreements for partners – define roles of partners
2. Write a business plan – this is your road map
3. Write a Private Placement Memorandum – for future funding needs
4. Determine office location – Location, location, location
5. Establish price level strategy – price vs. value
6. Write legal compliance documentation – avoid fines & penalties
7. Write employee handbooks – define your company culture
8. Develop job descriptions/evaluations – make sure employees know what & how they are doing
9. Determine pay structure – reward without overspending
10. Determine computer & software needs – have capability to handle workload
11. Install accounting system – measure and know where your business is now and will be
12. Website development – position to deliver proper message
There are so many things you need to do before you consider growth opportunities. As you can tell by the placement of this factor, this step is crucial to the success (or failure) of businesses. Check your foundation for cracks and fix them now while you still can.