“Wait… What? Destroy My Business??”
No, you didn’t misread the headline.
We’re actually going to tell you in this article exactly how to make sure that your business dies. Dead in the ground, buried, and never coming back.
Why would we do something like that?
The answer lies with the late, great Charlie Munger (the architect behind Berkshire Hathaway’s long-term success, and one of the more brilliant business minds of the modern era). He once said that he wished someone would tell him where he would die… that way he could just avoid going there. He was being tongue-in-cheek about it, of course, but the principle is simple: success can come by way of INVERSION, not simply by way of innovation.
Everyone is susceptible to decline, no matter how powerful.
However, if you sit down and truly think about what would kill your business from time to time (in his book “Thinking Fast and Slow,” Daniel Kahneman refers to this as performing a “pre-mortem”), you will quickly identify pitfalls that you can avoid way before you face them.
Let’s take a look at 8 business killing decisions that you should absolutely be inverting right now if you plan to still have a business a decade from now.
Overthink Everything… Until it Makes “Perfect Sense”
Our brains are hardwired through evolution to do whatever it takes to keep us alive and safe. That’s why it is so easy for them to get bogged down with agonizing over every possibility before committing to a course of action that feels risky.
The best decisions for your business will often feel the scariest. There is no scientific reason behind this that we know of. Risk is simply a necessary component of winning at business.
Thinking well and processing well are “table stakes” in the entrepreneurship game. It’s the ability to not OVERthink things that is rare and exceptional.
Perhaps one of the greatest decision-makers of all time, Winston Churchill, gave us a brilliant frame from which to think about difficult decisions.
Success is not final, failure is not fatal: it is the courage to continue that counts.
Start a Bunch of Things – Then Don’t Finish Them
Ouch. Now we’re getting into some fun stuff.
Visionary business owners are easy prey for “shiny object syndrome,” where each new thought and idea that crosses their brain has to be executed on right now.
This becomes especially dangerous as the business does begin to scale. Because it’s one thing to have a hundred good ideas a day when you’re the visionary AND the integrator for your business. However, once you have a team at your beck and call who can actually take your ideas and run with them… you run an immense risk of burning your team out very quickly by giving them constant whiplash.
The end result is a million little projects that never got traction and ended up just being wastes of time that didn’t move the ball forward.
Go it Alone!
One of the single greatest determining factors of long-term business success is not your mission or your drive and passion.
It’s your environment.
Who you surround yourself with on your journey is more likely to make or break your business than you will ever know. On top of that, your environment is one of the easiest things for you to directly engineer.
This is easily one of the silliest mistakes that new business owners make. They think that going “ghost mode,” tuning out everyone else, and heeding only their own counsel will get them farther than leveraging others.
You can pay to get into a mastermind, hire a mentor, or do any one of a thousand things that will expose you to the type of thinking and insights needed to change your life.
Stockpile Everything
If you’ve never checked out our training called Cashflow for Consultants, here is a quick lesson. Money is always moving – it is meant to be transferred. There are actually only three things that you can do with capital:
- Store it
- Spend it
- Multiply it
Everyone wants that last one, but what they fail to understand is that the ONLY way to do that is to keep the money moving. Not to sit on it.
Take your cash flow and work with a good financial strategist to find ways to deploy those dollars and put them to work bringing you more dollars.
Hoarders tend to go broke… slowly.
Treat the Business Like Your Personal Piggy Bank
While we’re on the topic of cash and re-investing, here’s a fast way to demolish your business… pillage the business each month to fund your life. Treat the business like your ATM, and not like a legitimate enterprise or asset.
This is not rocket science. If you want a defensible, SELLABLE business, then you need a balance sheet and you need assets.
End of story.
If you act as though your business only exists to fuel your lifestyle, then that is all it will ever do, and it will fizzle out VERY quickly.
Hire Cheap, Hire a Lot… And Let Them Stay Forever
It is possible for you to be “understaffed” on talent… but “overstaffed” on bodies. This is extremely dangerous, and is almost always a result of hiring purely based on cost, and not based on potential lift.
Oh, and not being nearly fast enough to fire lackluster and underperforming players. The amount of people you hire is not a badge of honor. Team size is purely a vanity metric that is overrated. Team efficiency and honoring your “revenue per head” metrics – vastly underrated.
It will always be far more beneficial to your growth to have a small, lethal, and nimble team. Not a large, bloated, and subpar team.
Ignore “Seasonality” and Freak Out Every Time There is a Speed Bump
Only the most immature business owners on the planet believe that every business should be “up and to the right” every month. Or that seasonality and market fluctuations don’t effect them. They do.
This is why we see so many clients freak out and start turning down (or turning off) advertising as soon as costs start to increase.
Don’t do it. Just don’t. When others retreat, the true warriors advance and that’s how they take ground.
Recognize when fluctuations are happening and adjust – but do not crumble. Seasonality is a part of business. The faster you learn this, the more bulletproof you become. Extend the time horizons and look at the larger picture OFTEN… then zoom back down into the weeds.
Have Bad Reasons (Or No Reasons) for Growing
It’s genuinely astounding just how many business owners we come in contact with at The Wealthy Consultant who want to grow something big… MASSIVE even.
However, if you simply ask them, “Why do you want to grow something big?”
*crickets……………..*
They either have no real reason beyond, “I just want to…”
Or they have such piss-poor and flimsy reasons (like MONEY for instance) that it’s hard to really tell if they even enjoy having a business at all.
Let us make this very simple. You need to have good reasons for what you are building. If you do not, the market will sense it… and they will eat you alive and spit out your bones. Why you are building MATTERS – because everything you do, and the excellence with which you do it will be touched by it.
Understand your mission. Know what is pulling you and what is pushing you.
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