I am sure you have heard the statistic that 50 percent of all businesses fail within the first year. But did you know that a whopping 96% them will fail within 10 years? What’s the problem? Most of them have a good product, and there is no shortage of people in the world to sell to. I’ll tell you that I’ve figured it out, and its not the competition, nor poor word of mouth, nor incompetent employees, nor “God must hate me.”
The only true reason a business fails is a lack of cash. It simply cannot pay its bills and goes kaput. Like, you could literally go through anything, even the worst recession or scandal, and as long as you can cover your overhead and service your debt, you are in business.
What about profit?
A lot of us grew up thinking profit was the most important thing, but profit has nothing to do with keeping a business alive. Do you realize Amazon has been profitable only two quarters in TWENTY FRIGGIN YEARS??? And no one can doubt its success.
Facts like these are why I focus on revenue generation when I bring the Volohaus team into a client company. IN BUSINESS, CASH IS KING, and everything should lead to generating more cash.
Now I am not trying to make anyone into Ebeneezer Scrooge or something, clinking their gold coins while everyone on their staff starves. But one of the first things I check for is the CEO’s ideas about cash flow.
Because if they are not revenue-focused, something is going to go wrong quick. In fact, sometimes the only thing wrong with the business is the CEO, while they sit around blaming this or that!
In a crash, its usually the driver, not the car.
Very few crashes are due to faulty vehicles. Of course, sometimes brakes fail or a gas pedal gets stuck, but in general accidents are caused by drivers themselves. They are inexperienced, overly aggressive, distracted, or drunk. And that’s how a lot of CEOs are too lol.
Some have a habit of blaming the car, but they need to look at how they have been driving it. Occasionally, that’s a difficult thing I have to bring to a business owner’s attention.
I don’t lose too much sleep over it because I am there to save the business, not them personally. Most good things in our world come from great companies. When I help one generate enough cash to thrive, that’s not only more progress in the world, but it’s also a lot of food on a lot of tables.
Fortunately, Volohaus has kind of a kick-ass track record at turning things around — if I do say so myself. Well, not kind-of, it totally kicks ass! (check out how many Inc 5000 and San Diego Business Journal prize-winning companies are customers of ours)
Often, our work is like turning lumps of coal into diamonds. A company owner or CEO will have no idea of the potential they are sitting on, and our team polishes that into a cash-generating machine through PEOPLE, PLAN, PROCESS, and PLATFORM.
Of course, you cannot polish a turd. So, if the CEO (you) is the problem, maybe we need to work on a reorganization or profitable exit strategy that’ll reward you for all the effort you have put in while keeping the business alive.
I can explain all this to you on the phone if you like, no pressure or obligation. I truly love talking business and am available for a quick call any time. If I don’t pick up because I am with a customer, please leave a message on my cell at (760) 815-4464 or shoot me an email to firstname.lastname@example.org.