Why Success Can Kill Your Business, Part Three

Having success is only part of the equation. The other part is knowing what to do with that success.

We learned about how anticipating too much success can kill your business. Hiring before you need to, buying equipment you don’t need, etc. So, that means that you should keep your overhead as low as possible right? Wait until you are desperate to spend money on your business? Of course not!

Not anticipating success can also be a killer. There are a lot of reasons for this. For one if you don’t anticipate success, and what that means to you, you will never actually be successful, because you will work forever. That’s why you have to Have a Number. If you don’t anticipate success you can outgrow yourself. How do you anticipate success? Great question. Knowing where you are is the first step. Having a plan for where you are going is another. (have I said make a budget recently?)

But thinking about how things will need to change as you grow is the best way to ensure you stay successful. And deciding what those trigger points for change will be is a critical part of this thinking process.

There is a great business book out now called What Got You Here Won’t Get You There. I have not read it yet, but it is next on the Guru list, so expect a more in depth review later.

I think the title says a lot though. If you are a one-woman operation making $100,000 a year and you want to have a business making $500,000 a year I promise that how you run at $100k will not and cannot work at $500k. And you can forget about making a million bucks. Remember the inventory example from part one? Where all the profit was sucked back into the business? Or the over-worked knowledge worker who got so much new work they couldn’t pay the bills?

Success, or more correctly, growth, has a profound impact on a business. You need a different strategy to run a growth company than you do to run a mature company. You need different tactics to run a business with 1 employee, 10 employees or 100 employees. Just because what you did got you to this level of success does not mean it will get you anywhere beyond that. Doing things the way you have will only get you to where you are.

The last company to make buggy whips was probably really good at making them.

Success can breed complacency. This is the greatest threat success creates for your business.

All the technical things can go wrong: over-investment, under-investment, poor capital structure or budgets, bad management and poor hiring. But if you are not complacent they can be fixed.


“…Cause at the top will be the same place you hang from…”

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