by Michiel Schuitemaker, Featured Contributor
Allow me to share with you some insights on how CEOs of failing businesses often claim to have all the answers and how they ignore all the reasons why their companies are failing to begin with.
Last year I worked with two particular companies that had a surprising amount of things in common. Both companies were failing and contemplating courting another round of investors, both had spectacularly missed the forecasts after the first round of investments as well as the second round and both still had the same Founder / CEO at the helm with an optimistic outlook. To pull off a second round of investors after blundering the forecasts is a feat but to do so a third time would be a miracle in my opinion. With such a track record, who will believe in yet another rosy forecast?!
Both companies contacted me for help in finding additional funds and discussing changes within the company that would position them better for another round of funding. What I found remarkable is that after several months of working with both CEO’s, neither one implemented any of the real changes we had discussed as necessary. One particular bafflement was that both companies were still investing in research that would not bear fruits for years to come. We agreed that the company more than likely will no be around then anyway at the rate of the losses incurred so why invest in products for a future that will never see the light of day? Both CEOs agreed but ultimately didn’t take any action. Both CEOs were committed to developing new products and were already selling their customers on the future products to come. Could this be the very problem why they were close to bankruptcy to begin with?
How are you running your company? Do you have a proper balance between short term goals and long term ones? Are you keeping an eye on the bottom line to ensure profitability without sacrificing the future of your business? Any business only exists by the grace of it’s customers. Without customers, there is no business but without profit, there is no business to provide the goods and services to your customers with. So you have to be profitable otherwise a business is not sustainable. This is the balance to find.