Can Every Business Earn A Profit And Grow?
The answer is a resounding “YES!” but with a small qualifier… some businesses may require too large a cash infusion, or be based on an erroneous supposition, or have ownership who refuses to make changes, and in these few instances may have to be liquidated. However, in most cases, your business can earn a profit and grow, no matter the condition you may find yourself in at the moment.
It is also true that a great percentage of small businesses fail within the first 18 months, and that all but a few remaining standouts will fail within the first three years. So, how can we reconcile the above opinion and the real life statistics? I believe the answer is simple.
Most small business start-ups, or businesses that are already underway do an excellent job delivering their service or making their particular widget. It is the science of doing business that is severely lacking and therein lies the seeds for failure. Businesses fail due to lack of a vision, lack of an effective organizational plan, the non-existence of a clearly defined business plan, no cash flow pro forma, no sales and marketing plan and no operational or financial plan. Without these things, a small business owner is traveling blindfolded and is destined to crash and burn. Without adequate information and a plan that makes sense, one has no idea whether they are doing well or not until it is too late to make adjustments and they have hit a wall, usually out of cash and paralyzed, forced into making survival decisions without adequate preparation or support. The results are failure or a downturn eventually ending in failure. I see it all the time.
With a carefully drawn business plan and a supporting cash flow pro forma, along with the necessary financial reports and other key indicator systems, a small business person can chart a course to success and make adjustments along the way if he wanders off course. With the appropriate tools and required preparation, along with careful management of the systems required to help guide development and profitability, any business can both profit and grow.
So, can a business in trouble be fixed on the fly and made profitable and poised for growth? Yes, most definitely, but it depends on what’s left of the business or where on the disaster scale it is. However, most business situations can be made better and the business can be made profitable with growth in sight. One only needs to add the missing element to the business–the science of doing business profitably and effectively. It’s important to realize that it’s not necessarily the effectiveness of the job you are doing in delivering your product or service that determines your profitability and growth and ultimate success. While quality performance is important for long-term success, it may be the science of doing business effectively that will determine whether or not your business will have the chance to be a long-term success, or whether it will die a short-term death.
