As a business owner, have you ever found yourself on the wrong path? You started out in the right direction, and then you got busy with the day-to-day. But one day, you look up and notice that the business is not heading where you want it to go. Maybe you’re getting new customers, but you and your staff are working harder and harder and your profit margins are shrinking. Or little things keep falling through the cracks, and you’re worried that your customers will notice. When you look ahead, you see the business heading down the path toward more work, more issues, more frustration.
You might find yourself asking, as the Talking Heads said, “How did I get here?” Well, it’s easier than you might think to end up in this situation. Business owners are busy people, working hard in an ever-changing environment. Once you’ve picked a path, it’s natural to forge forward, not stopping to ask whether it’s still the right path to reach your goals, until you notice things aren’t going the way you had hoped.
When you hit this point, here are three questions to ask yourself before you make any decisions.
- What do I want?
- Will the path I’m on get me there?
- If not, does the business need a quick fix or is it time for a revamp?
What do I want?
Before you can decide on the path, you have to know the destination, right? And over time, your business and personal goals may change. It’s important to get some clarity on those goals before you make changes to your business. Otherwise you can invest a lot of time and money, only to end up with a business that isn’t what you wanted. Remember, a change in your business goals doesn’t necessarily require a big change in your business operations to align with your new goals. So don’t hesitate to be honest with yourself and your team about where the company is heading next. If your existing goals feel right, then this step is brief; if they feel outdated, spend some time on updating them before going on.
Will the path I’m on get me there?
When we talk about “the path I’m on,” we really mean the business model and operations. For example, the products or services you’re selling, your target audiences, your marketing and sales approach, how you deliver what you’re selling to the customer, and how you track and manage the whole operation. So ask yourself, does the way the business operates serve the business well? If you’re asking these questions because you’re noticing problems like shrinking profit margins or unhappy customers, then the answer is likely that something about this “path” needs to change. Which brings us to the biggest question…
Does the business need a quick fix or a revamp?
There’s an art and a science to answering this question. As I discussed in another blog post recently, identifying the root cause of a problem requires some digging into your operations. Is your shrinking profit margin because a supplier raised their prices, or because your staff are giving discounts to a growing percentage of your customers? And if it’s the discounts, then why are your staff discounting prices? The root cause of that could be anything from employee dissatisfaction with compensation, to an attempt to soothe customers who are angry about a delivery delay caused by a problem elsewhere in the business. So it’s important to figure out what’s really going on. You can try a technique called the Five Whys to help you dig into the root cause of an issue.
If the problem is a single issue, such as increasing supplier costs, you may be able to solve it easily, for example if you’re able to find an alternate lower-cost supplier with the same quality and terms. However, sometimes you’ll find that the issue seems to relate to a lot of other issues, or other aspects of the company. Or it’s hard to pin down what the exact problem is, no matter how many times you ask “why.” This is likely a sign that it’s time for a more comprehensive look at your operations: a revamp of the way things are done.
Change is disruptive, even when it leads to a much smoother operational flow. A revamp of your operations involves multiple changes, so it’s a bigger time investment than a quick fix. Besides figuring out what needs to change, you’ll need to plan a way to implement those changes while limiting or managing the disruption to your operations. Ideally, if you regularly check on your company’s performance and take action before serious issues start to arise, you’ll have more time to implement big changes gradually and give you and your staff time to adjust to new ways of operating.
Although making changes can seem overwhelming, especially when you and your staff are working hard, most growing businesses need to adapt their operations to some extent every couple of years. Seeing this process as a natural part of the business growth cycle will help; you can plan regular reviews of company performance and take action before you hit a crisis point.
