4 Business Threats That Can Doom Your Business
For years I operated 2 small businesses. One in the creative industry, the other in trading. Like many SME owners, I went through plenty of highs, and 5 times as many fails. One thing I've learnt, excruciatingly, who you keep your eyes on makes that world of a difference whether you get to sleep well at night. And no, it's not your competitor you need to keep tightest tabs on. Your competitor needs to work twice as hard, thrice as ingeniously to maintain an advantage over you. Your biggest business threats come from the folks around you. They can wind up your baby, before you even start to realise you're in trouble.
1. The Failed Supplier
The most obvious of all subtle business threats.
How many of us work independently? Almost always, we depend on one or more persons outside the company. You sell clothes, you need a reliable manufacturer. You service machines, you need a dependable stockist. You're a grocer, you need plantations to grow the produce! The moment your suppliers screw up, you go down too. In many cases, horribly.
But I'm being limited with the examples. I'm implying only operational failures. You know, they ran out of stock. They had some logistic mishap, etc. Truth is, crises like these are usually manageable and forgivable. What's unforgivable and destructive on the other hand are suppliers who attempt to manipulate you. They do so by feeding you misinformation. By terrifying you with hearsay and gossip. By constantly bargaining for better deadlines. By, in a nutshell, always attempting to negotiate for more favourable contract conditions on grounds of friendship, trust, and all those beautiful, beautiful words.
When you give in to such tactics, you aren't establishing a trustful relationship. You are being a sucker. The summary of it, your supplier is who you give business to. It might feel like it, but your supplier is neither your friend nor your confidante. Arm's length, in other words. Professional relationship, or you are in for a major business fail. The moment you detect manipulation, the moment you sniff any nonsense, switch to someone else. Follow the golden advice and always keep an updated list of potential suppliers. Ensure everyone knows you have such a list too, this keeps the nonsense at bay. The best way to operate a business, keep it as one. Always.
2. The Failed IT Expert
Ever encountered this? There's something wrong with your laptop. You bring it to a shop. After standing there for hours , the technician says, hey, there's nothing to be done. Just thrash it and get a new one. Yeah, thrash it and lose all your files, your photos, and your porn.
Or, there's nothing wrong with your laptop. But you just can't stop yourself from going into that nice shop with all the latest gimmicks. And each time you go in, that nice assistant sweet talks you into buying something. Something that offers you no actual worth, other than the momentary thrill of ownership.
If you're reading this post, chances are your business depends on some sort of information technology. Be it email, a website, or an online information sharing service. Your IT guy's role should thus be to empower your usage of IT, and to be your problem solver when issues arise. He should not be telling you to thrash things whenever a crisis surfaces. Neither should he be incapable of predicting such crises. Most of all, he should not be using you as a guinea pig to try new stuffs, especially things that add little value to your operational advantage. Of course, there are times when the situation is truly irredeemable and there is no way to salvage. These tragedies considered, your IT guy should be the one safeguarding your operations and wallet. He should not be the one you associate with more expenditure or frustration. In other words, a solution provider. Nothing else.
3. The Failed Bookkeeper
Not your accountant or auditor. This is the one who keeps tracks of your bills, your invoices and your cash flow. Now you may ask. What's so important about the bookkeeper's job? You pay people. People pay you. That's all, right?
No. Because a clean set of books is crucial to keeping your business healthy.
Your books contain the summary of your business. They tell you immediately where you have been spending too much or too little. They also inform you right away who to go to when you require some ad-hoc service. In other words, they are your frontline men in identifying looming business threats.
A clean set of books also saves you money at fiscal year-end when they go for auditing. It is money down the gutters, raw humiliation even, to be billed more by the auditor's office because the folks there have to spend nights pouring over your crumpled bills and scribbled notes. You most certainly also do not want to be questioned over some baffling expenditure you have no way to trace.
Most importantly, sloppy bookkeeping chips at your business reputation like cancer. When you are consistently late in paying suppliers, when you always lose suppliers' bills, or, when you are utterly sluggish in pursuing payment, what kind of impression are you projecting? Would suppliers be inclined to put you at the foremost of their list? Would customers soon be considering strange strategies with you? And these are before the G steps in. Yes, poor bookkeeping almost always leads to taxation and compliance issues with the G. Once that crops up, be assured you are going to stay on blacklists for a long time. Repercussions are endless.
4. The Worst of All Business Threats. Well Meaning "Friends"
Allow me to get personal. When I started my business, I spent a great deal of time having tea, chats, tête-à-tête with certain friends I made. These are other business owners. Some in the same trade, though not as competitors. A typical gathering can last one whole evening.
Why did I spend so much time with them? I thought I had much to learn. They were very willing to share too, the endless stories and tips they had. In short, our gatherings were a mix of bosses' commiseration, grouches and market insights which I believed contain so much wisdom. I felt blessed to have such buddies.
I was a freaking fool. They were the worst business threats of all.
Maybe it was ill luck. That I met the wrong people. Half of what this gang told me were exaggerated truths. The other half were deliberate sabotages. Beautifully packaged, sincere suggestions that were in truth heinous ambushes that I took years to recover from. For example, the nagging encouragements to buy certain equipment that they themselves found worthless. Why did they do it? Only the Lord knows. Maybe it was just sheer malice. Maybe they were venting their own business frustrations on me. Or maybe by some warped theory they concluded one lesser player in the market is always better, even if not a direct competitor. The lesser folks around, the more gold there is to mine. Something like that.
Here's the truth. The world of business is a battlefield. It's not a cliché, it's the truth. Be very careful what you believe, and what you bring into your business. Friendship cannot and does not exist in the same form in the business world, compared to what you have with your school buddies or social mates. There is always grim competition and antagonism underlying all business relationships. Not to say that you should go around being an ass, but you must evaluate what you hear. Correspondingly, be mindful what you tell these acquaintances too. You never know who they might also be having tête-à-tête with. Gossip is frequently packaged as generous gifts.
Have you experienced any of these business threats?
Which of these business threats is the most damaging?
© 2016 Ced Yong