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Need Inspiration, growth slowing - $1m behind YTD Targets

Discussion in 'General Entrepreneur Discussion' started by cantwait2, Oct 1, 2007.

  1. cantwait2
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    cantwait2 Silver Contributor Speedway Pass

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    My main business has been going gang busters over the last few years and we've been typically at least doubling sales year on year.

    While I knew this year it would be unrealistic to expect to double as the numbers had become reasonably large I didn't expect the growth to slow like it has.

    We are currently $1m behind our YTD targets at this point, I just did a full review of the numbers this morning and am now sulking...

    I need some inspiration:hurray: otherwise it will be :smx6:
     
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  2. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Any clue why the numbers are down? Overzealous expectations or forecasting?
     
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  3. Yankees338
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    Yankees338 Bronze Contributor

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    I don't know what your business is, but I'll see if I can help.

    Often, once a business becomes "successful", the owners become content with where they are and just let things be as they are, expecting the growth to continue. Basically, my question to you is this: What have you done to innovate your business? Have you done anything to attract new business?

    I'm obviously no expert in the field of business as I've never owned one, but maybe I'll be able to open your eyes to something you would have otherwise missed. If I didn't, well then I'm sorry for wasting your time with my post! Good luck! :)
     
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  4. cantwait2
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    cantwait2 Silver Contributor Speedway Pass

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    At the beginning of the year I felt the expectations were reasonable based on our growth to date and factoring in our ability to recycle the numbers.

    I think Yankees post does have something to do with it, to what degree I'm not sure.

    This year I have slightly altered the direction we are heading as a company, maybe it hasn't been the been the best strategy but it's one that I enjoy and I want to keep what I do fun so I don't regret it one bit.

    I have built this business from nothing and every cent that has been spend has been weighed up with carefull consideration as often losing it was not an option. The result has been an extremely fine tuned operation.

    Where this has left me is in a bit of a risk adverse approach to business. I have been fortunate to have a fast growing company almost wholely built on finding and exploiting niche areas of promotion. However now they are harder to find and I am still in the mind set of not wanting to through a lot of money at mainstream advertising/promotion etc.

    So what I decided was that the direction I was going to take was one I enjoyed. Start multiple innovative businesses and push them into the same cost effecitive niche areas I have found to date with the primary business.

    Obviously things take time to fully develop so I find myself in the lag period I guess, wondering wether it has been the best strategy.
     
  5. cantwait2
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    cantwait2 Silver Contributor Speedway Pass

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    Thanks Yankee, it's a good point, I think as outlined above it's more a case of me diverting attention to other areas, but I think overall it's a valid point.

    I enjoy building businesses, new, fun and exciting...I must admit once they are firing I see maintaining them as more of a job than a fun area of self employment...
     
  6. cantwait2
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    cantwait2 Silver Contributor Speedway Pass

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    While I'm on this rant, if I'm honest about it, I'm not some really knowlegable guy on business...I've learnt my share of lessons but maybe I'm reaching the limits of what I can chern out under my own guidance...I've never had or pursued a business mentor but maybe I need to start tapping into some more advanced skills than my own...this forum is a good start :)
     
  7. china
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    china New Contributor

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    I'm a little confused with this: "$1m"

    Is that $1 million or $1 thousand? (In printers terms, 1m is 1 thousand, 1 million is 1mm -- got that?)

    If you are a thousand dollars behind, well, that should be easy to fix. If you are a million dollars behind -- and it is because you are used to doubling -- this is not so easy to fix! It's very easy to double a dollar. It's very hard to double a million dollars!! Perhaps your expectations were too high? Making +50% on a million dollars is damn good!

    If you took the company in a different direction -- well, that could be the problem.

    Eventually, with any company, you are going to reach saturation and growth is not going to be easy. The bigger the company gets, the harder it is to grow. Tiny companies double and quadruple -- bigger companies do not.
     
  8. randallg99
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    randallg99 Bronze Contributor

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    china, he is implying 1mil...

    cantwait, I am going through a similar scenario... I dont believe you are `bleeding` or losing money my experiences may or may not help you... I think you mentioned in prior post that you would not disclose the kind of business you are in so I cant speculate... but I will share my thoughts about my business which saw an actual decline of revenue by 3 million last year and we are currently en route to recovery.

    It may be a year or two before we achieve our revenue peaks again.

    There were several reasons for the slow down in our conditions, both internal and external and there are also several things I did to counteract.
    Slowdown due to:
    1. pricing of gas/energy influenced consumers decisions to buy
    2. advertising/marketing changes
    3. complacency
    4. bad, bad personnel
    5. one of the locations was undergoing major changes in surrounding area
    6. high expense ratio
    7. high inventory ratio
    8. consumer is house poor/credit burdened


    What we have done-

    1. virtually eliminated and cut all fat. our expense ratio is now lean and mean and poised for growth. all expenses on P&L were evaluated - we called all service suppliers and negotiated new pricing.
    2. advertising/marketing- we dramatically reduced our budget and forced our sales department to create new ways of gaining and retaining business (this may be most applicable to you)
    3. in one of our locations, we developed a niche that applied to a segment of the market that has been completely free of competition until our entry into the arena
    4. my personal complacency was partially to blame and upon recognition of this, I put other ventures on hold (including real estate) and started a new focus on the business as if I just opened it... I evaluated all existing operational and sales systems and have been non-stop tweaking them to my original intentions
    5. I have been developing my sales staff on a consistent basis and bringing in outside training and development tools ie Brian Tracy.
    6. overhauled personnel. I had to consolidate to reduce payroll, so getting rid of the losers was a no-brainer. The ones who were `laid-off` immediately were the ones who lacked customer service skills and/or did not have good sales ability, or just had negative connotations.
    7. reduced inventory

    we took some other steps to increase our profitability. Last year, my P&L took a 600k loss. This year we are looking to break even with these drastic measures.

    If there was anything I could have learned in hindsight, and that is this: I should have made drastic reductions in expenses upon immediate trends of downturn of business conditions instead of waiting to see if conditions would change. Nobody is indispensible and that is one thing I should never have forgotten.

    Any other questions, I would be happy to answer if I am able.
     
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  9. cantwait2
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    cantwait2 Silver Contributor Speedway Pass

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    Thanks randallg, it's valuable feedback. That it a huge effort to swing $600k on the bottom line in such a short time, congrats on that firstly, great achievement.

    Over all we are in a pretty good financial position as a company and I tend to penny pinch on our expenses constantly to make sure we have minimal overheads...I guess that's where part of my delema on growth comes from...should I risk more $$ on some speculative promotion and advertsisng or maintain steady as she goes?
     
  10. china
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    china New Contributor

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    Okay, I'm lost. I don't know what either of you sell -- but I would like to make a suggestion.

    Cutting back on advertising can be good, but cutting it out altogether is usually a bad idea. IF your advertising is effective, if should be bringing in new business. You might want to re-evaluate the effectiveness of it, but I wouldn't recommend cutting it out altogether.
     
  11. ProInvestor
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    ProInvestor New Contributor

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    In the good times reduce expenses, during the bad times increase your marketing!

    A little cliched but true!

    Rgds.
    ProInvestor
     
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  12. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    I won't even try to tell you what to do, as I am a nobody in this regards.
    I've helped a little bit in the planning stages of the company I work for, and noticed a similar thing: Expected growth based on past performance and not on expected return from new customer or increase spending by current ones (i.e. because we grew 120% last year we should be able to grow another 120% this one, instead of looking at why the current customers would spend twice as much on our services/products or what new customers would bring to the table). I call it GAS, "growing addiction syndrome")

    Also I noticed that you mentioned that you took the company in a direction that is more personally rewarding for you, so it seems you are giving more value to your personal realization than to your financial bottom line. Nothing wrong with it, but you will probably have more fun and less income.

    Last point I noticed, it is not exciting anymore for you. Maybe is time to cash out by selling it now and then start over again with something that is more fulfilling and exciting for you. What's the point of being in the fastlane if you are not enjoying the ride?

    Again, like I said, I just wanted to pinpoint things I got by reading your posts, and not because I am a business owner that can actually tell you what to do to improve your situation.

    PS: Forgot to mention, it also seems like you changed the course and strategy of your company without revising your targets based on the new direction you are taking the business.
     
    Last edited: Oct 2, 2007
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  13. HenkHolland
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    HenkHolland Contributor Read Millionaire Fastlane

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    Cantwait, since you're more of a creator of new businesses than someone to mind a more mature business as you indicated, why don't you sell your business now?
    I don't know what you will be able to get for your business now, but it seems better to exit before profits start slipping and the business starts losing value.
    Remember you have to do what you love and from your posts I take it that you love building and not managing.

    You can then concentrate fully on new ventures.
     
  14. cantwait2
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    cantwait2 Silver Contributor Speedway Pass

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    Thanks andviv, valid points I think sometimes we forget just what it took to build the business to this point and to expect to find a large portion of those sales again in addition within the year is a big ask.

    Thanks Henk, Selling isn't an option for me right now. Yesterday I was in the initial paralysis of recieving bad numbers.

    But today I'm over it and ready to fight another battle. I have scheduled mettings with all my key people and it's time to shake things up :smx1:

    I am 100% confident in the strategy I've chosen for the business as it is not only for my enjoyment but also I believe a long term one that will maximise profitability.

    I am simply in a lag period before these new ventures get full traction.

    I want to build a $1b business and my primary business may struggle for large growth gains after $20m so in reality I want to expore other ventures so I have more opportunity to find the bulls eye on what will be the $100m or the $1b business. Maybe it will take 100 seperate businesses to do it...if so then I'm game.

    All these ventures are under one universal brand so ultimately it is still an appealing group to a ultimate buyout should that be the direction to take.

    So thanks guys, I appreciate your thoughts as they have helped me clarify my own...and with a new day...here we go :icon_super: :fastlane: :icon_super:
     
  15. Yankees338
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    Yankees338 Bronze Contributor

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    This is why you'll continue to be successful. It seems like no matter what the circumstances are, you remained unfazed and come out even better off then you started. I truly applaud your ability to overcome any obstacles that come your way. :hurray:

    So I'm not gonna say don't worry, but don't lose sleep over this. Be confident in yourself and your business (as you seem to be) and just stay positive. You'll be fine! :thumbsup:
     
  16. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Well, at least you had the system to review the numbers and had the chance to change direction and take action as needed. You had a baseline and a target so it was easier to identify a problem.

    I was reading this morning about the importance of "real-time financials". Many entrepreneurs are used to review quarterly statements, but this is just looking at the past. This is new concept for me.
    Maybe putting in place more controls and taking the time to review them will help to identify problems sooner. The sooner you can tackle it, the easier it will be to overcome the obstacle. Thanks a lot for sharing.
     

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