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4 Leading Indicators that Signal a Need for a System

We have another guest blogger on Direct Talk today - Dave Baldwin of Baldwin Management Consultants

I remember one of my early jobs in the 1990s, working for a telecom component manufacturer. I worked in a facility that quadrupled in size over a four-year period. On the heels of this aggressive expansion, the dot-com bubble collapsed, leading to mass layoffs. I remember looking at one row of brand new assembly robots. The lot of them had cost millions to build and customize, and they were never even taken out of the shrink wrap. I watched our plant go from boom to bust in a matter of months, and the same thing was happening all over the industry.

Years later, when I first made the decision to go into business for myself, I came to realize that the fundamental problems that cause businesses to fail are essentially the same, regardless of company size. Most of the time, people blame it on bad luck, the economy or other factors outside of their control. Sadly, most of the times I've seen businesses collapse, the situations were entirely preventable. It all boils down to one single factor: discipline. Many business owners are simply unwilling to do what must be done until it is too late, or until the cost is too high.

Over the years, I have learned to recognize some early warning signs that the situation may not be as rosy as it seems. I have found that successful business owners are the ones who pay attention to signs like these, and who take proactive action as soon as they pop up. The businesses that don't survive are the ones that bury their heads in the sand and hope for the best.

You're too busy to do any marketing.

Most businesses are guilty of this at one time or another, especially in the early years of development. Owners of successful business, though, feel uncomfortable when the company is not actively pursuing new opportunity. They are keenly aware that the clock is ticking and that no cash cow lasts forever. They’re always asking themselves one burning question: “What’s next on the horizon?”

Revenue is rising sharply...but cash flow isn't.

When times are good, people tend to be loose with the company's money, especially if it's not coming out of their own pockets. The temptation to throw money at problems is strong during the boom times, and a business can start to hemorrhage cash when this happens. It may also result from taking on projects a financial loss. This can make the numbers look great today, at the cost of draining the company's resources down the road.

Emergencies and fire drills are becoming the norm.

When everyone is running around like chickens with their heads cut off, a storm is brewing. Interruptions not only kill efficiency, but they often prevent people from getting their jobs done altogether. The root cause of this problem is usually a combination of many factors, but it generally stems from poor communication. In a disciplined work culture, people know a true emergency when they see one, and they respond rather than reacting.

The best people are getting burned out.

You may have heard the old saying: if you want to get something done, give it to a busy person. Applying this advice can lead to some unfortunate side effects. When one person does a disproportionate amount of the work, this fosters an atmosphere of tension and resentment. These key employees quit, and no one wants to take over their jobs. When a replacement is found, the new person is (surprisingly!) gone within a few months.

Most small business owners say that they want to put systems in place. Virtually all will agree that implementing a system is a great idea. Most, however, do not understand what it takes to fully implement a system and tend not to make a priority of it soon enough. I believe that this single factor can ultimately spell the difference between growing a business and running it into the ground.

If any of the above sounds familiar, ask yourself one question: what do you already know you need to do, that you’re not doing? And what single step can you take today to interrupt this pattern? It does not have to be anything big, and it probably shouldn’t be. Many times, the first and smallest step is the most impactful.

Discipline is not a unique gift, given only to the winners of a genetic lottery. It is the end product of putting the right combination of habits in place. Any business can create discipline, and it begins with the commitment of one individual.

Dave Baldwin is a Business Consultant who went off on his own, starting out as a marketing copywriter in 2007 after a decade in the technical field. Since then, he has worked with businesses in a variety of industries, predominantly in the area of marketing strategy. Dave lives in Raleigh, North Carolina.

Dave Baldwin

(919) 723-7916

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