Get Yoda's Wisdom

Your hear so much, especially in these trying economic times about business failure. Small companies that have been in operation for years and years, suddenly finding themselves having to close their doors. But how can that be?

They had passed through the "magical" first "n" years (you know all the quotes from this crowd and that about "x%" of all business fail during the first "n" years of their existence) and come through it successfully, maybe even making a little money.  Growing their business, adding new employees. Isn't that supposed to ensure success? Nope!

Markets change.
Sometimes brought about by technology, sometimes by socio-economic changes, sometimes by new competition and, sometimes by subtle, things like mobility. And these changes, however external to the business, affect, not only the way business operates, but its ultimate success...or not. And, just as often, businesses don't change. They keep doing the same thing, month in, month out, year in, year out, never thinking about doing anything differently. "If ain't broke, don't fix it!"

Not enough small businesses pay enough attention to the changes around them.
They get comfortable. "Hey, we've been doing this like this for ten years and it's worked. No need to change." And then one day, their largest customer moves their business overseas and suddenly 25% of their business evaporates...overnight. They weren't paying attention to what was going on in their marketplace. How overseas competitors were making inroads. Or, perhaps, they saw it, but discounted it. "Hey, Jack's been a customer since we started in business. A few dollars difference in price isn't as important as the loyalty and customer service we've provided." Wrong! In tough economic times, loyalty and customer service, often, get replaced by "lowest price."

Now, some of you are saying, but things like that you should see coming and react.

While that is true, many companies just don't. And it's not just about being constantly vigilant regarding what is going on in your market but as much about what is going on inside your own company.

For continued success, companies need to, periodically, re-invent themselves.
Or at least, periodically, take a hard look at what they're doing to make sure they understand what is working and what is not (or has stopped) working. But, unfortunately, it's the rare company that does that. Self-analysis is tough. Driving change is tougher yet. But a fundamental cornerstone of small business success is agility, which you've heard me espouse time and again. And this is where, for those of you who can master it, real dividends can be reaped. Keep your company fresh!

Look external...
You need to be market aware. Know what is going on in the markets you serve. Changes, subtle or otherwise, that appear to be driving it - new technology, new competitors, new customer demands, whatever. Pay attention, talk to suppliers, talk to customers, talk to industry experts. Understand where your company and products now fit and might fit in the future. And start to anticipate how you need to change. Sometimes you need to re-invent the company to meet that change.

Look internal...
Look at processes that haven't changed in years. See where they can be streamlined or automated. Use technology to your advantage. Especially look at people who have been doing the same thing for an extended period of time. Have they retired in their job, but you're still paying them? When process or people behave in the "way we've always done it" mode, it's time for change. And sometimes, you just need to change it up, to re-invigorate your company.

Change is the recipe for continued small businesses success. Anticipate it, welcome it, drive it. It will keep your business fresh, alive ... and successful!

"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!