This is true in business, as well. Whether you are starting a business, already have one or are just working for someone else, trial-and-error go hand-in-hand. No matter how “prepared” you may think you are, there will always be something that comes along and challenges that thought. There are ways to improve and become more efficient. Improving to allow yourself, your company, your employees to be more productive. When you have a system that flows, it is also more beneficial to your clients and customer base. Being more effective means less loss – which means more income.
When you start a business, the idea is to have a business plan: a roadmap from going from where you are to where you want to be. However, a lot of small startups skip this step. There are many reasons for this; sometimes, it is as simple as having an idea that you want to run with. Those who do start with a business plan often forget to revisit it, to see where they are in the process. What has changed in the goals or what needs to change; things get hectic and we don’t think about writing down our goals; we just keep them in our heads.
It is important to know how to get from point A to point B without losing money along the way – finding the areas of weakness and addressing them to build your business and make it stronger. A lot of businesses fall prey to what I like to call the ‘sieve effect’. This is where the money is pouring out through the holes in the bottom of the boat. The holes are so small that you don’t notice them so much, and yet you realize you are paddling harder but not making much progress. It becomes even more dangerous when this is your “norm.” You think, “yes I am making enough money to pay the bills and I am keeping my head above water,” yet you aren’t getting past the bobbing up and down. You become satisfied with the status quo, never realizing that you have a leak.
Leaks come in a variety of ways. They can include:
Inventory. Having inventory on hand but not realizing it and ordering in the same items. Over-ordering. Under-ordering. Not having any form of inventory control. Not raising the cost of the product you sell when the cost of materials go up, or the cost of doing business increases (such as the rise in utility rates, employee rates, taxes, etc.)
Employees. We all hope we have good employees. There are times, however, when your employees are doing as little as possible to get by. They want a paycheck without doing the work. Without the proper management staff to guide them and make sure the work is being done, you are paying them to do nothing. Another pitfall is not having the materials in stock to provide them with the work they need to do. If you have a business that does any type of manufacturing, for example, without the materials in stock for the employees to work with, you are paying them to wait around until those materials show up for them to work. Not only are you paying your employees to do nothing because you don’t have what is needed in stock, but the more it happens or the longer it takes, the more you are underlining that it is “okay” to be lazy. You set the tone of your business by how you handle not only your clients but the examples you show your employees.
Bookkeeping. This is often the bane of most small businesses. You can’t afford to hire a bookkeeper or accountant, so you have to do it yourself. You don’t want to, so you prioritize other things over this area. The problem is that you need to know what your profit and loss statements are. You need to know what is making money and what money is being spent. Can you find a supplier for less? Are you charging enough? Are you paying your bills on time, or are you making late payments and incurring finance charges or late fees? Have you set up an emergency fund to get you through a hard month or two?
Running a business is no easy task. It doesn’t matter if it is a Fortune 500 company or a small one-man operation. There are difficulties and pitfalls you face along the way. How you respond to each issue makes all the difference in the world. You need to decide how to build your empire and how big you want it to be. Success is determined by our goals, not by the landmarks of others. What I qualify as being successful might not be the same as someone else.
You need to be willing to try new things to see what works for your business. Be flexible in your goals. Be willing to allow for mistakes to happen and then learn from those mistakes. Remember, mistakes aren’t bad, they are a great learning curve. They offer an opportunity for growth. Often trial-and-error are the best teachers you can get. You learn what works for not only for you, but for the growth of your business.