Elite Business: Be wary of false prophets and white knights as you scale and grow your business
In this article, first published in Elite Business, I Explore being wary of false prophets and white knights as you scale and grow your business
Exhausted, frustrated, driven business owners are vulnerable to false promises. We encounter various individuals claiming to have the solutions we seek, often leading us down costly paths. Let’s explore some of the most common pitfalls, look at how to avoid them, and design your business to scale and thrive.
One group to watch out for is software salespeople. We all have strengths and weaknesses when it comes to managing our businesses. Software solutions, like Enterprise Resource Planning (ERP) systems, promise to address our management shortcomings. However, it is crucial to approach them with caution. Many providers offer comprehensive solutions, but purchase, customisation, and training costs can be significant.
Before investing, we must map out our commercial system that marries and matches how you have positioned your company to provide an exceptional customer experience. That blueprint should guide your ERP decision, not the limitations and capabilities of the software itself.
Another common pitfall is hiring team members based on their charisma and passion. We are all vulnerable to slick promises that we can see could fill gaps in our capabilities or business activities when hiring new employees.
To make informed decisions, precede your hire with a clearly defined job function. Beyond asking ChatGPT to spit one out for you, design it yourself, aligning it to your positioning. Any and every job should shape up into a system of activities, and all should integrate to create a single customer experience across and through your commercial system.
It enables you to recruit more effectively, capacitate faster and turn this significant investment into a return more deliberately.
Collaborations and deals with external parties can hold great promise but also carry risks. Many businesses have fallen victim to partnerships that did not deliver the expected results.
Be clear why you are doing it.
A recent study indicated that around 84% of mergers and acquisitions failed to yield the value that seemed to justify them in the first place. And when partnering with someone or an organisation, besides first assuring alignment and non-compete parameters, dig into the detail of who does what, why, when and how. Then, dig further before inking an agreement.
Selling a business is a significant milestone but often fails. Flattering statements and attractive numbers from potential acquirers may grab our attention. However, conducting thorough due diligence ensures buyers’ credibility and protects our years of hard work. It’s an obvious, bland statement, but do it! Arm yourself by mathematically understanding your business’s value and securing a body of evidence to back that up. To secure a clean exit, negotiation must be pragmatically informed, not emotively driven.
Family and friends
While well-intentioned, relying on family or friends to solve business challenges can lead to difficult situations. It becomes particularly challenging to part ways with underperforming relatives or friends.
It is crucial to separate personal relationships from business decisions. By maintaining a clear delineation between personal and professional spheres, we can make strategic choices based on merit and the best interests of our businesses.
Building and growing a business takes time and effort. By being aware of your vulnerabilities and these common pitfalls, you can save valuable resources and maximise your chances of success. Trust your instincts and stay resilient on your path to business growth. With a proactive growth mindset and a systems-based approach to building out your business, you can build your business into your greatest wealth-generating asset.