There is a sad story in the Omaha World-Herald today about a local business that is struggling because of a lack of education.
The company sold airline vouchers that weren’t valid. The story says there was not an intent to defraud but that demand simply ballooned and the company did not have systems in place to prevent the problem.
“(the lawyer) blamed the company’s woes on an inadequate business model, adding that the owner was truly sorry for its failure.”
“The young business owner’s model was failing…She had a business model that was great when it was small…As it started to grow…it ballooned, it mushroomed…and she did not have the business sophistication to understand once it reached a certain level.”
As a business coach, I see this all the time. The main reason for business failure is a lack of education, a lack of understanding of business principles. This translates into financial troubles, cash flow failures, inability to service demand. But the root cause is the business owner not having the knowledge they need to operate a growing business.
It is especially telling that this business’ problems began with growth. It seems intuitive that growth should be a good thing – and it is! But growth presents serious challenges and business owners often aren’t prepared for them. Growth almost always requires investment – more money going in than coming out and if owners don’t have those resources, things can go South in a hurry.
I encourage all business owners to be in a state of constant learning – not only about their industry and products, but about business principles and concepts. You must have a plan to develop yourself, not just your business.
Of course, I recommend ActionCLUB, my 6 month power course on business ownership. It’s great fun and serious preparation for growth. Come for a free visit!