Business owners invest time and money to ensure success. There comes a time, though, when enough is enough. You simply cannot continue to put short-term band-aids on cash-flow problems.
Business founders are committed to the success of the business. And, really, when they personally invest in their business, it’s showing how dedicated they are. That’s important, not only to the eventual solvency of the company, but it also demonstrates to investors that they believe in the company and that they’re willing to do whatever it takes.
Here’s the problem, though. If founders invest money in the business and wonder when (or if) it will ever end, they need to go back and make sure they’ve covered all the basics first. Before contributing another dime to your own business, you should run down this quick list of questions. Fill in the blanks. You may find that you can implement a few quick-and-easy strategies to shore up your company.
What’s the Plan?
Every business needs a business plan, as well as clear and actionable steps for how to will accomplish goals. So, what does that mean?
First, always do the research and analyze the target market. Based on your findings, you should have a product plan, but you also must know what sets your business apart, as well as how you will sell and distribute the product. Without a plan, you’re throwing money away, and also seriously undermining your ability to entice investors.
Where’s the Money?
Even with the best-laid plan, it’s possible that you really don’t know how you’ll get the money, or where all the money is going. Yes, it’s just possible that you simply aren’t the best one to handle the finances of the business, and that’s ok. Once you realize that, you can take steps to remedy the situation.
The fix could be something as simple as hiring accounting help or asking a friend of the family for part-time help. It could even mean that you need to take an Accounting class in order to budget, balance the books, and start accurately tracking those expenditures.
Who’s the Expert?
Everyone needs a mentor and/or advisor, a person (or group of people) who shares their life experience and helps us avoid common pitfalls. It’s possible that your mentor may have the solutions you need to help you stay afloat, and even start turning a profit.
Another reality in business is that everyone can succeed with less pain and suffering by working together. Beyond the value of knowledge, there’s also the reality that business owners can make connections and negotiate deals better when they have the business partners, mentors, and employees who are experts in each of their fields.
Sink or Swim?
If you’ve sought out advice, you’re tracking your expenditures, you have a well-formed plan for how to grow your business, produce your product, and successfully implement your distribution strategy, but you’re still floundering, there comes a time when you need to look at the bottom line. You may have the resources to continue to personally invest in your business, but the question then becomes: Should you?
If your venture is still not sustainable, you may be able to salvage what you have by rethinking your business plan or seeking other experts to offer you their advice. It may be a perfectly viable business plan, with a target market, great product and excellent distribution plan. Your timing may just be “off.”
Don’t despair. You’re not the only one. In fact, 50% of businessnes fail in the first five years. That could also mean that your next venture will be a success!