Whenever you find yourself on the side of the majority, it is time to pause and reflect. – Mark Twain
This quote from Mark Twain will serve you well on your path to massive growth and success.
Common sense leads to failure
Most people think success in business all comes down to common sense; and once again most people are wrong.
There were hundreds of social networks running around trying to succeed in the early 2000’s and most of them failed. What Mark Zuckerburg did with Facebook was not common.
The supermarket industry was said to be overly saturated and a death sentence to new incumbents when Walmart first opened. Sam Walton was laughed out of meetings when he said he first started the number one company in the world. Wallmarts success was not common.
Cirque De Sou entered a dying industry that for all intensive purposes was considered suicide to even attempt it. Their near unrivalled rise to the top was not common.
Even in rising markets like “Apps” the failure rate is over 80%. To succeed it does not take something that is common.
Society continually pushes the notion of being normal; but it takes abnormality and uncommon sense to be great. Being normal means being 30 pounds’ overweight in America, being normal is being divorced (more people are divorced then are married), being normal means you are on your way to cancer and heart disease and being normal means your business will fail. It takes being abnormal and having uncommon sense to succeed.
Over 90% of companies fail; and the remaining few that manage to survive are not doing much better. Most of the companies that survive are hanging on from the grit of their teeth barely making any profit.
It is a sad fact while many businesses start with the right intentions most all businesses don’t reach the potential they could or should.
The number one reason for business failure is a lack of cash flow. The reality is; cash flow is just a symptom and is not the root cause. The root cause is far more serious and far more diverse than just the simple answer of running out of capital.
“Of the businesses that fail, 90% do so because of a lack of skills and knowledge on the part of the owner.” Dunn and Bradstreet
In 70% of business failures, a key factor was the owner not recognizing or ignoring weaknesses and then not seeking help. – SCORE & U.S. Bank
The inability to stop doing things that are no longer working and to discontinue people who are no longer performing is the number one reason for failure.
Revenue DOES NOT equal success
Since Most Businesses Fail…
Earl Nightingale was right when he said in “Lead the Field”:
If you have no successful example to follow in whatever endeavour you choose, you may simply look at what everyone else around you is doing and do the opposite, because – The Majority Is Always Wrong.
Now the term success is thrown around far too flippantly in today’s economy. It seems as if success is as black and white as the following statement:
If you have not declared bankruptcy you are officially successful.
If you have declared bankruptcy, then you have failed.
This view is not only myopic but it is detrimental to the business community as a whole. This kind of survivalist thinking does not lend itself to long term growth.
If you have been around business long enough you start to realise that gross revenue is not everything. Early in my development I used laud over businesses that were generating $10 million a year, it was such an incredible feat. I used to imagine what kind of incredible lifestyles these CEO’s would be living; from butlers waiting on them hand and foot; living in their mansion by the beach and taking their speed boats out every day for fun.
I thought that any business that was generating over 7 figures truly defied the odds and came out on the other side thriving and reaping the rewards. While they did technically defy the bankruptcy odds; many of these companies never have any rewards to think of. As I started working with these companies and started to see how they were functioning something disturbed me. Looking at their profit models and bottom lines It didn’t take me long to realise there were some huge issues. On the outside and in the public eye the CEO’s were envied and considered giants of their 7,8,9 figure companies. On the inside, these same CEO’s who were giving out motivational speeches and business advice were frightened and unsure what the future would hold.
Many of these 7,8,9,10 figure companies were making very little or no profit; many were literally on the verge of bankruptcy. The CEO’s, managers and employees were being buried into the ground, overworked, grossly underpaid and afraid of the future.
Of course it is only natural that even large companies are not always profitable in their search for growth. Business 101 would state you raise money, you invest money, you grow (hopefully), you make a profit (pray), and that generates a return for investors.
Uber which is valued at over 68 billion and just in the first half of 2015 generated 3.63 billion in revenue is actually losing money still.
If you were to step into Uber headquarters you would see nothing but happy faces who were confident of the future. Why is it that when Uber is losing 10’s of millions a year it is fine but when most other businesses lose money they are well on their way to doom.
The difference is that Uber is doing it strategically just like Amazon had once done. At one stage Amazon was losing 100million a month to gain market traction and we all know how that turned out.
Just like Amazon has successfully done before Uber is positioning itself for future growth.
Now I am not here to comment on the validity on Ubers business model and their longevity; but you can agree that there is a difference in the way they see their losses.
In this business ecosystem the issue facing most start-ups, small businesses and even legacy S&P 500’s is, no one has any real strategic idea of what is going on. Many of the losses or lack of profits now has no strategic or long term benefit; there is no purpose or good reason that these companies are going in the red.
Mediocrity is not acceptable no matter your environment.
When I find myself alongside these companies to help there is always one idea that they have that is truly destructive to their success. It seems while they are worried about the profitability and the looming threat of bankruptcy there is one idea that helps them cope. They have this notion that because their situation is so common; because everyone else in their industry is struggling; because they are part of the norm that it is somehow okay that they aren’t as profitable.
I hear this sentence far too often “Well most of our competition is struggling too, so we don’t look too bad at the moment”.
This does not excuse any company to forfeit a real strategic plan for all their losses.
If this issue wasn’t so widespread and serious it would be quite facetious.
I can only hope that because you are reading this that you do not fall for this type of mentality. Do not be fooled by the façade of being part of the majority of businesses.
Here at LouisDharma I will outline contrarian ideas and concepts about business that only the successful and highly impactful companies adopt.
At times there will also be some extremely simple and obvious ideas that you may gloss over and discard as being common sense. In these times I want to challenge you by asking…
“is it common practice?”
The thief knows not to steal, yet they steal anyway; people know not to eat junk food yet the obesity rate is increasing; adults know that they should save but the average save rate is under two cents per dollar.
The world would be a far happier place if the ideas people knew actually became instinctual.
The world does not care what you know; the world only care about what you actually do.
Whether you are a start-up, small medium business or S&P 500 company the principles throughout LouisDharma are equally as relevant.
Every start-up has what it takes to grow into a small medium sized business and then grow into a S&P 500 company. In the last 50 years only 61(12%) of the S&P 500 companies remain in the S&P 500 at the end of 2015. Every S&P 500 company has what it takes to recede backwards and go bankrupt as we have seen many times in history. The principles you will discover throughout here and questions that you will be forced to answer will elevate the way you look at your business. You will discover how you can grow at incredible rates and at the same time defend against new incumbents and thrive even when the market goes down.