Posted by DebtKid :: May 8, 2008 @ 12:35 pm
Let's be honest. Most businesses fail.
Not necessarily Enron-type failure, but many businesses continue to make mistakes that others before them have already made. Here are 7 signs your company might be on the wrong path...
1. You have a "great idea" (but no engineers)
Everyone seems to have a "great idea" that they float around whenever starting a business comes up in conversation. A "great idea" without great execution is like a painter without paint. Just because you can imagine the Mona Lisa in your head, doesn't mean you can paint it.
Real Life Example: That annoying frat boy in college
2. Your company is a "cross between Facebook, YouTube and reddit"
Your great new "social networking" site has a grand total of 3 members. And that includes your Mom and Dad.
Real Life Example: That side project you're working on right now. Seriously, I'm not joining it. Don't ask.
3. You are losing money with every sale
Charging $15 for a product that costs you $20 is going to get you in a world of hurt real fast. If you're company has negative gross profit margins, you're likely on your way to see the judge (in bankruptcy court!)
Real Life Example: Pets.com had negative gross margins for every quarter of its operations. How much were they paying that sock puppet?
4. Your credit cards are maxed
You could run an insanely profitably business and still go bankrupt. Remember "Cash is King" and "A bird in hand is worth two in the bush".
If your business is out of money, it's likely out of business. Bills need to be paid to keep operating.
Real Life Example: Boo.com - Boo ran through 160 million before liquidation in less than two years of trying to be the "it" place to clothes shop online. Boo-hoo is right.
5. You can only make short term money
Want to make a fast buck? Go to Vegas. Want to build a successful business? Treat your customers like gold, not just a quick sale.
Real Life Example: Countrywide
6. Your "balance sheet" doesn't balance (without some document shredding at least!)
If your business has to "get creative" to balance your balance sheet, it just might be a sign something is wrong.
Real Life Example: Enron.
7. Your business is creepy
No one likes a snoop. If your business is creepy, it's probably not going to gain widespread adoption. Unless it's so useful no one minds that it's a little creepy (Gmail?).
Real Life Example: Pudding media. Pudding will insert ads into messages (voice and text) you leave or send to your friends. It targets these ads by listening in on your conversations.
Photo by soundfromwayout
2 Comments
Oh my gosh I'm laughing out loud. This is a fabulous list. I know someone who had a business and he says he would have been better off handing out hundred dollar bills as customers came, and referred them elsewhere.
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