How Not to Do Business

Traditional business or incorporated private limiteds versus so-called on-line versions. Trade based proprietorships against a team of partners. Family or a group of mates?  However we shape the models, the main aim of having a business is to generate cash flows, and then being able to utilise such inflows for further positive outcomes.  We can call them partner profits, share dividends or co-operative returns.  Underlying such aspirations, to succeed, I believe, are the stringency of some key factors.  They are that the product or service must be viable; there are sufficient synergistic team or personal  drivers; motivating tensions between challenge and reward to overcome roadblocks; and a shared positive purpose amongst the players.  Over two weekends, I had the opportunity to come across a variety of business models and reflect on how not to do business.

Showing a rude face to customers:  The interface between customer and the business can be facial, on-site or through cyberspace. The nature of payment collection points, delivery of goods and services and handling of feedback and complaints echo the soul and personality of the business.  Outsourcing such critical points can be a mistake if not handled well.  Your products or service may not articulated or represented at its optimal best.  In a fast moving world of greater choices, in any industry or geographical area, mobility and change can destroy much built up goodwill and reputation at a much faster pace than anticipated.

Not jumping to engage further with any customer, potential or actual: I am surprised that some businesses never make more use of the opportunity with customers at the door, who may be hesitant to come in, or just arriving when the doors are closing. Instead of communicating with such individuals, they close the door right on their face. For example, even if the food kitchen is closed, offer them a coffee.  Even if the coffee machines have been cleaned out, give them a trigger card or offer for them to come back another time.  Of course, on-line websites are never closed.

Focusing just on fast turnover:  This is the bane of the ethnic restaurant, fruit or grocery market trade in most so-called big cities. The food and produce may be great, but there is clarity that the business wants diners to eat as fast as possible and shoppers to  move on as quick as they can -  to open up space for the next wave of customers.  And it is not even a fast food joint.  Add this with lack of conversation from staff, crowded seating or shopping aisles and too much noise.

No need to earn funding and not hungry to do business: These are places which passer-bys suspect are just facades, fronts or used to while the time away. A child can figure out that they do not even earn enough even to pay the utilities, and yet they survive over the years.  Most telling, the decor is at least twenty years behind.  You may want to suggest to such business owners that they can earn better returns by converting their cash to property.

Not having succession planning:  Especially vulnerable are businesses owned by a sparkling or dominating personality.  Buddhist thought reminds us emphatically that the only constant is change, and if we do not heed this fact, we suffer from such a consequence. Chinese street wisdom observes that wealth usually does not last for more than three generations - the first builds it, the second consolidates it and the third can enjoy and fritter it away.  It is not seeing the current business as only part of a larger plan and process.

Not recognising the weakest point and acting to mitigate this:  It can be over stocking, borrowing too much or not realising why some customers interact with the business only once.  It can be just relying on only one advantage, the classic "putting all the eggs in one basket".  Such a  business may be heading to the same fate as the Titanic on her maiden voyage, just because the key people in charge are in denial or ignorance about the quality of the holding plates used to build an otherwise great liner.

Not taking advantage of the disadvantages:  Every market jurisdiction has its own peculiarities, both beneficial and not so advantageous. At times,  businesses succeed because it operates only in areas without hovering clouds.  However, equally important and significant is how a business can differentiate itself and grow precisely because of the threatening clouds.  Clouds in this context can pose problems and discourage, but realising this perspective, your business can offer relevant solutions for a growing market.

Making use of your greatest assets when required - and dumping them otherwise:
Some businesses pay lip service that people are their greatest assets.  When the economy is bright, money is thrown at people to attract them to work for the business, and just as fast, these very same employees are shown the door at the very hint that ever increasing profits can be threatened.  Would customers be impressed, as the very same customers can be actual or potential staff.

Not acting on a niche need in the market, and keeping your business exciting:  Market conditions change, economies go on a roller coaster ride and competitive parameters vary. A business, whilst having a reliable core, must also be nimble to make use of new opportunities, especially in unserved corners and new products and services. Haighs in South Australia used to deal primarily in farm equipment and not hand made chocolates.  The business did not rest on its laurels, but was willing to transform itself to a new dimension.

Comments

Popular Posts