How many of us have had the experience where we knew about a business that seemed to be humming along with the owner making lots of money only to find out that the business had had a major issue and was now closed?
I know in those situations I am shocked to hear that news. How could something like that have happened? Everything seemed to be going so well.
Unfortunately, these circumstances happen way too frequently.
Another good businesses suddenly forced to close.
Each time I learn of one of these failed businesses I am curious about what could have happened that could de-rail a company that had such good momentum.
All too often, once I learn the reason for the failure, I’m not surprised that it failed – it was only a matter of time.
What I have found is that these failed businesses have something in common.
They never really were sustainable over the long run. Each business could do very well for periods of time but the owner hadn’t addressed lingering issues that had the capability to stop the business in its tracks.
It may have been that the owner had a health issue but no succession plan in place.
Or, the company lost a key employee or customer. Often, the business slips behind competitors and customers no longer want them.
Of course, some owners enjoy the good life a little too much and their once successful business drifts away from what made it great.
When I owned my business, I kept a close eye on its key success factors.
These factors were my dashboard for whether or not the business was sustainable. As the owner, that was a key priority.
In my view, every business owner should assess the sustainability of his business and as a starting point – it is as simple as completing a short quiz.
As the owner, if any of the questions make you pause or creates concern for you then it is likely a good idea to dig a little deeper on that issue. That’s a good time to bring in an advisor and see what can be done to protect the value of your business.
Business Sustainability Quiz for Business Owners
Business sustainability touches on personal, financial, social and environmental factors for the owner.
Use the following questions to determine what you could do to make your business more sustainable.
1. Have you identified your personal priorities and objectives – and is your business aligned
with these goals?
2. Have you taken the time to identify the key business factors that drive bottom line results?
3. Have you considered the amount of time that you need to participate in your business
now – or the amount of time required of you in the future?
4. Can you continue to produce your products/services at healthy levels of profit?
5. Are you able to attract and retain the talent/teams that will help you attain your desired
bottom line results?
6. How well is your company perceived within your business community and industry – is
this adding value to your company brand?
7. Have you addressed the environmental or regulatory issues that could seriously impair
the future operations of your business?
8. Do you have a succession plan or exit plan that would maximize the long term value of
your business?
9. Do you have an action plan to improve your business that addresses your key success
factors?
At the end of the day, none of us want to be that business owner that was running along nicely but suddenly faced failure.
A review of sustainability factors for your business can lead to opportunities for improved financial results, new business growth, enhanced brand value, improved lifestyle and a better bottom line.
Addressing the sustainability of a business can go a long way to avoiding the failure scenario. Something worth some time to consider – and to prevent.
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