Types of People Who Have No Business Doing Business pt.2
When it comes to business, there are attitudes that win, and then there are those that lose.
This series of posts is dedicated at looking into those that don’t work in a business.
Our last post looked at how it’s important to not be complacent. If a certain business model worked in the past, it doesn’t guarantee success in the future.
In this post we are going to cover another type of attitude that doesn’t belong in business.
There’s an art to cutting costs. But if an expense is going to add value to the overall service, then it’s not a cost. It’s an investment.
Penny wise; pound foolish
Nishad is the owner of Rich Fabrics, a linen supplier. He started the business nearly 4 years ago. Since the leisure industry was booming, he was sure that this would be a success.
Nishad is a one man show, a ‘my way or the highway’ kind of guy. He’s also hardworking. A good fella.
He started out small, and worked his way up to establish Rich Constructions.
Nishad has 2 showroom locations, and employs 8 staff.
Since Nishad is a hard worker, he does all the purchasing, negotiating with the suppliers and clients, and checking the accounts at the end of the day.
He’s very careful with each penny being spent. The business depends on minimizing costs.
The 8 staff are school leavers. The showrooms are minimal. Product brochures were made on MS Word. He took the pictures with his camera phone. Leaflets are printed in black and white. He does all the marketing materials and content work.
The sales staff clean the showrooms when they’re free.
There’s no uniform or formal dress code policy for the staff.
Staff take leave as they see fit. Not all of them come to work on time.
Worst of all, no one stays for more than a year. Rich Fabrics is the place staff come to gain ‘work experience.’
Nishad hires new staff through word of mouth. Vacancy ads are too expensive.
The website hasn’t been updated in quite a while.
The accounting package is MS Excel, and inventory quantities are anyone’s guess.
Nishad has to close shop for a day or two for stocktaking.
Things have been the same for the last 2 years. And try as he might, Nishad is unable to scale the business, to grow it. He feels stuck.
His kids haven’t seen him in days, since he gets home very late, and is out again before first light. His wife is very supportive, but she also urges him to spend more time at home.
Nishad thought of hiring a few more people so he could assign some of his roles and responsibilities. But at this stage, he doesn’t want to do that. Most of all, he was afraid.
There were many competitors and sharing details of his business with staff was a risk he didn’t want to take.
He’d also thought of hiring a consulting firm, who were in the business of fixing the problems people like Nishad have found themselves in. But, he saw it as a cost, as opposed to it being an investment. And he didn’t have the time to get in touch.
So, he went on like this.
Gradually, the accounts and inventory started to look funny. 8 employees became 3.
Then the number of customers and clients began to drop.
New customers weren’t just coming in.
His suppliers don’t answer his calls now. The last shipment of goods from a supplier was 3 months ago.
Clients start to return purchased goods. Something about quality issues.
Who’s to blame here? Why aren’t new customers coming in?
Why aren’t employees staying?
What Nishad doesn’t understand is that without investing in infrastructure, systems or the people to run them, everything is just kanashot. He saw it as a cost to invest in systemizing his business. He saw it as a risk to delegate his tasks and responsibilities to others.
Anyone going into business shouldn’t view spending on structuring the business or investing in services/personnel as a cost or expense. If that’s the case, might as well shoot yourself in the foot while you’re at it.