TIGER Talk Recap: The Root Cause of Almost Every Business Failure (and How You Can Use This Knowledge to Avoid it and Scale Your Business)
Most entrepreneurs want to scale their business, but it takes a collaborative approach and formalized process to do so and avoid disasters. There is one root cause that makes almost every business fail, and if you know what it is, you can avoid it and make a plan to grow.
Molly Grubb, founder of Grubb Wealth, was Innovate New Albany’s TIGER Talk speaker on July 26. Offered throughout the month, TIGER Talks educate business owners on the topics of technology, innovation, growth, entrepreneurship and responsibility.
Molly’s presentation “The Root Cause of Almost Every Business Failure” identified a common mistake that leads to a business’s demise: a business owner acting like an employee of their business instead of as the owner of their business.
Molly explained that acting as an employee only creates a job for the owner and increases risk. She said in order to build a successful, sustainable business, or a “dynasty,” you must first build the framework.
The framework consists of four pillars:
The stronger your pillars are, the stronger your dynasty will be.
Referencing the equation “(Purpose x Value) = Dynasty,” Molly said that a dynasty is built when you define your purpose in life and the value you want to offer to those around you. Being clear on your purpose will guide you through the stressful times in your life and help you add value.
When identifying your purpose, Molly advised the group to ask themselves the following questions:
- What’s important about money to you?
- What particularly is important to you about that value?
- Is there anything more important than that value?
Once you know your purpose, you will begin to add value. Molly said there are three components to adding value:
- Have multiple revenue silos. Identify all the different ways you can make money in your company. Look at your current silos, and identify new ones.
- Systems and Delegation. Have formal processes in place for delegating tasks to other people. While it may seem counterintuitive, constantly look for ways to replace yourself, so your business can operate in your absence. Take a close look at the systems and resources available, and use them to make your business more efficient and productive. Molly said her team uses apps that assist with time documentation, email and scheduling, as well as CRM workflows to stay focused and organized.
- Free up money. Think of ways to diversify your money. Molly said 80% of businesses have 90% of their money tied up in the business.
Molly said there are four ways to free up wealth:
- Investing, not saving. Saving is an emergency cushion; investing is for compounding growth.
- Tax mitigation. Figure out ways for creative thought. You won’t be the expert on everything, but surround yourself with experts in their field, and make a decision based on their best recommendation.
- Leverage. Use other people’s money and time to grow your business and scale it.
- Cost reduction. Add someone to your team who can analyze your financial statements and advise you on the best ways to reduce costs.
To stay focused, Molly advised completing the following sentence:
“My company will have $________ in annual revenue when I sell by __/__/__.”
Having this goal in front of you each and every day will remind you of why you are doing what you do. You don’t need to wait until retirement age to sell all or parts of your company.
Grubb Wealth helps business owners gain control of their business, realize their purpose, and build personal wealth through a well-defined process. If you have any questions or would like to learn more, visit Grubb Wealth’s website, or contact them at 614-461-3205.
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