Preventing Small Business Failure: Top Ten Company Killers (Part II)

April 02, 2014

by Mark Paggioli

Last week we began our look at the first five of the top 10 small business killers. From bad management and cash flow problems to a lack of marketing, underperforming sales, and insufficient financial reserves, we pointed to some of the most likely challenges that business owners face when they assess the value of their businesses. Let’s dive back into the list.

6.   Failure to Integrate Emerging Technologies

Technology is the great enabler for American manufacturing businesses, yet many are averse to—or don’t realize how to—use it to create a distinct competitive advantage.

What to look out for:

  • An unwillingness to change with the times. No business can survive without some fundamental flexibility; this means scouting technologies to help drive future growth.

7.   Operating Under Financial Lockdown

Some business owners cut all programs unilaterally when the road gets rough. This is the opposite of identifying differentiators within the business and trying to make prudent investments in them. Marketing isn’t a cure-all, but it is the most reliable means of telling would-be customers how you can help solve their problems.

What to look out for:

  • The temptation to make across-the-board spending cuts. Figure out a way to maintain core assets, whether they are people, new investments, marketing programs, etc., and build a strategy to get the most out of them.

8.   Inefficient Supply Chain Management

When operational costs increase beyond sensible best estimates, the business could be placed in jeopardy with every order shipped.

What to look out for:

  • If it’s been more than a year since you invested in your supply chain—both in reviewing cost-saving opportunities and building stronger connections with your current suppliers—you could be risking missed shipments, excessive costs, and other hazards

9.   Ignoring the Rules and Regulations

Operating a business entails the responsibility of being compliant with all federal, state, and local laws and regulations. For those who are ISO Certified, follow CGMP protocols, or hold any other certifications that govern their manufacturing principles, the same holds true. Breaking compliance is a fast way to get a bad reputation that could stick around for the life of your business.

What to look out for:

  • Reduced vigilance when it comes to the administrative and other aspects of compliance. It is often much easier in the long term to follow the rules and regulations than to work around them.

10. Over-expansion

Rapid sales growth can quickly overheat a business as it struggles to deal with its growing pains. When this happens, over expansion is a real risk. As the company gets spread too thin, performance could dip, and costs might get out of control. These dysfunctions, and the discontinuities associated with rapid expansion, could all lead to an implosion.

What to look out for:

  • A lack of a business continuity plan. This is a great way to position the company for steady (or at least managed) growth. And it’s just one of the many ways CONNSTEP can help you grow and manage a prosperous enterprise.

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It’s not enough to simply avoid these common pitfalls. The businesses that boast multi-generational success recognize—and act on—the need to invest in organizational improvement, systematizing and building processes for revenue creation. These firms will not only survive but thrive after the departure of the owner.

If you found yourself nodding along with one or more of these items, contact CONNSTEP today to learn more about how we can help you avoid these 10 common business killers.

CONNSTEP solved a huge problem for us and helped us bring our delivery rate to 100%. As a direct result of that, we have been awarded with an increase in business which, ultimately, will also benefit (our supplier) Har-Conn.”

CT manufacturer Pegaasus

Chris DePentima

CEO, Pegasus Manufacturing Inc.

“I see great value in the new experiences and perspectives CONNSTEP brings to our business, at reasonable prices. They’re not like consultants, they’re like partners in the business – willing to roll up their sleeves and help.”

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Mark Burzynski

President, Arthur G Russell Co

“CONNSTEP has proved to be a tremendous resource for ESI. CONNSTEP has helped us to adapt to today’s marketplace and remain a quality minded, competitive global player. Our ISO/TS16949 implementation process was efficient and rewarding. I look forward to our future projects with CONNSTEP.”

esi CT manufacturer

Ron Delfini

President, Engineering Specialties Inc.

“CONNSTEP worked with FuelCell Energy to educate and facilitate Lean initiatives and to help meet our needs to establish an overall production improvement plan. This plan has been utilized over a period of time as a ‘guiding light’ to spur numerous improvements that dramatically reduced our product cost.”

Tom Lucas

Manager, Fuel Cell Energy

“CONNSTEP is a valuable partner to Hologic, providing the expertise and ‘outside eyes’ everyone needs to keep their continuous improvement on track. We are now well-positioned on a dynamic growth path and look forward to a long-term relationship with CONNSTEP.”

Greg Safarik

VP Manufacturing Operations, Hologic

“Our experience working with CONNSTEP has brought us benefits we never expected. It’s a great team to work with!”

Bruce Wheeler

VP of Operations, Metal Finishing Technologies Inc.

“The goals of the team were to reduce manufacturing lead-time, reduce floor space utilized, and increase worker productivity. All the goals were met. CONNSTEP helped us to better compete.”

Tornik CT manufacturer

Dan Rubbo

General Manager, Tornik LLC

“The Business Growth Program is working well for us. We enhanced our website following the meetings to improve our SEO and become more visible to search engines. The segment on negotiating …  promoted changes in our thinking and improved how we interact with customers. The mentoring between sessions was helpful in boosting our progress.”

CT manufacturer Colonial Spring

Bill Lathrop

President, Colonial Spring Co.

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