Blog entry

How to Derail a Business

To keep your business running like a fine tuned train, you want to avoid any operational errors, mechanical failures or a direct collision with anything on its tracks. Just for fun, let us discuss the ways to derail any business.

An operational error in business could include anything from bad judgement calls to mismanagement of the entire organization. The easiest way to damage a business’ reputation is by having a high turnover rate, and unhappy employees. The saying is true; employees don’t leave bad jobs, they leave bad managers. To accomplish this, make sure the management or leadership style is negative and non-motivational throughout the business. The management should never offer advice, encouragement, or a helping hand when the employee needs it. Any conflict between the employer and the employee will help diminish the want for employees to stay with the organization. Further, an unhappy staff member will care less about their work and therefore, care less about the customers. You can recognize the business is close to this important stage in derailment when; employees spend more time on their cell phones than talking to the customers in the store, employees act like the customer is causing a disruption in their otherwise quiet day, and the staff continually neglects to return customers inquiries in a timely manner. These are all guaranteed ways to lower the amount of returning customers and make sales plummet.

Beyond operational errors, mechanical errors can result in any business under performing. One such mechanical error includes poor marketing. To accomplish poorly marketing a business, there are a few options. The first option is to not market at all. The business might not be making money off of potential new customers but it is also not spending any money. The second option is to put aside a massive marketing budget and spend it all without doing any market research to find the marketing channel that your audience will be using. An example of this would be publishing an advertisement on Snapchat that is meant to reach elders. The budget will be spent and there will be little to no sales in return. That is when you know the derailment plans are working.

If none of the above options are causing the business to be unprofitable, it might be time to step up the game and plan for a collision. A collision can be arranged in several ways including; over spending on inventory, under quoting or under charging for jobs completed, over booking and not fully completing projects, and over expanding operations too quickly. Any of the above situations will lead to outstanding payables that quick add up and a collision with financial trouble will be on the horizon. Also be sure to avoid paying the outstanding payables for long periods of time to allow the interest to grow on each account.

There you have it, a fool proof way to successfully derail a business!

While I hope that no business owner ever follows any of the above advice to destroy a business on purpose, the situations presented are real challenges that could occur. Recognizing the potential for an upsetting event to occur and being proactive against it can make sure that your business remains on the tracks. Operational errors can be the hardest to self-identify simply because analyzing the problem often means analyzing your own competencies and the competencies of those in the upper management positions. Meanwhile, mechanical errors or a “collision” with financial trouble can usually be determined by reviewing your books and going through data.

There are several options available to business owners to help navigate an organization through any rough patch. Discussing your business troubles with a business counsellor and an accountant can help put a new perspective on everything. Beyond being professionals at analyzing businesses and helping business owners plan for success, they are an outside source and opinion. An unbiased outside opinion can be much more valuable and rational than trying to figure out internal problems with the management team or on your own. If you suspect your business is having any of the above challenges, be sure to book an appointment with a business counsellor and your accountant to quickly regain control as you continue on down your tracks.


By Alexis Forseille

Community Futures Cariboo Chilcotin

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About Community Futures

For over 25 years, we’ve been fostering entrepreneurship in rural BC. We offer small business loans, business counseling and specialized programs to help you start or grow a business, and to help communities become more resilient and dynamic.

266 Oliver Street
Williams Lake, BC
V2G 1M1

Phone: (250)392-3626
Toll free: (888)879-5399
Fax: (250)392-4813