Earlier this week, the South African Minister of Finance presented the Medium-term Budget, and the news was somewhat disheartening. Government’s plan to dispose of some of its well-performing shares in Telkom, to offset its recapitalisation of South African Airways and the South African Post Office, is just bad planning. It’s akin to avid entrepreneurs who believe wholeheartedly in their business, but can’t let go of investing time and money into a bad idea, no matter the consequences. Time and money are finite resources, and pouring them into a bad investment can destroy your business. On this week’s The Money Show, we looked at how you can hit the brakes on a bad investment and start making the right type of investment for business growth:
Ditch the MBA Approach
Textbooks and research may offer you some guidance in building a business, but in sustaining it: truth is found in action. Rather than creating a large plan for building your business, adopt a lean, agile approach and take many, small, steps towards growth. That way, it’s easier to change course if you need to, and far simpler to curtail any activity that isn’t showing positive results for your company.
Get your ego out of the way and build your self-awareness
Building your business is a highly emotional experience and, as a committed entrepreneur, so much of your life revolves around your company. That’s where the passion for your business comes from. But, during a business crisis, getting your ego out of the way is critical. Perhaps you feel like you might be giving up, but managing a crisis within your company isn’t quitting – it’s adapting and responding to a problem. Don’t let your ego prevent you from listening to the truths you need to hear about your business.
Go to the honest source of truth
If you really want to know how well your business is performing (and you should!), ask your customers. Find a long-term, trusted customer and invite them to lunch – don’t just set a meeting. You’re far more likely to hear the truth behind their experiences with your business, in a relaxed environment.
Get an external party involved
There’s a very fine line between persistence and obstinately pursuing a bad investment, and finding that line can be difficult. Find someone you trust and respect, who will be able to offer you an objective perspective on your business. Ask for their input on answering these questions about your business venture that’s not paying off: Is it not paying off because the timing is wrong/the technology isn’t ready for it yet/or because it’s just not a great idea?
Devise multiple plans
Start crafting multiple plans for dealing with your business problem, and getting rid of the bad investment you’re in the middle of. By making multiple plans, you’re equipping yourself to be more objective about your decision, and removing any emotional attachment you may feel towards this investment you’ve made. It’ll also assist with helping you figure out which investment for business growth you should be pursuing instead.
Build memory to motivate you
Keeping a journal of what you do for, and within, your business, will help to motivate you in the future, and build a case of evidence for your future business activities. You’ll find that some activities are repeated, and be better equipped to eliminate elements that don’t work, more quickly in the future.
Collect the data
Reporting systems are a vital component of your business. Put reporting and data collection mechanisms in place from the very first day, and create a robust system that records every activity, and its outcome. That data tells the true story of your business – don’t be afraid to read it.
Use your team
No man is an island, and no business is built into an asset of value with just one person. Talk to your team members and ask for their input on potential problems, and listen to their ideas on possible solutions. By including your team in decision-making processes, you’re giving them ownership over parts of your business and, through responsibility, comes energy and commitment. With a committed team on your side, that’s determined to solve your business problems, you can get through just about any crisis.
Get over yourself
Mistakes are made every day, all around the world. You’re not the only one who makes them – remember that! The important part of making mistakes, is that you learn from them, and avoid making those same mistakes in the future.
How do you know when you’re making the right choice for your business? Aurik can help, and guide you towards making the right type of investment for business growth.