It’s a disturbing scene….walking or driving through a major shopping hub in your local area, to be faced with ‘For Lease’ signs popping up all over the place.

I know in my city, on the mid-north coast of NSW, 10 years ago, there were none.

Now, a different story.

What’s going on?

Is the all too common statistic put out by the Australian Bureau of Statistics, of more than 60 percent of small businesses ceasing operation within the first three years being seen more and more?

Statistics provided by the Australian Securities and Investments Commission reported corporate insolvencies for the 2011-2012 period found 40 percent had inadequate cash flow or high cash use, 44 percent of businesses suffered poor strategic management, and 33 percent suffered from trading losses.

In a nutshell…cash flow problems, no clear direction and poor business decisions, caused catastrophic outcomes for many business owners.

Case Study

Let’s call them John and Mary. They both have solid jobs, John in accounts and Mary a nurse, working for someone else…and they hate it.

John and Mary have always wanted to own a business, be their own boss and own a café. They search through gum tree and the businesses for sale through brokers and on the net.

They find the perfect business, the price is ok, and they decide to increase the mortgage on their own home to cover the costs of purchasing the business.

Excitement builds, hopes and dreams at an all time high…they figure they can learn on the job, it can’t be that hard running a business, maybe they will take a course offered by the local TAFE…staff a breeze, after all, their friends and family have said they will be supportive and come around often.

Fast forward 2 years. John and Mary have bought a job…without the income.

They are both working 7 days a week to save on wages, staff are nothing but a pain in the butt, who have no loyalty, or follow direction. The finances all over the place. Friends and family cannot be found in the café, they are too busy with their own lives.

Everyone else is getting paid and John and Mary are struggling, the personal cost on both of them, both physically and mentally is appalling…their kids help after school…there was nothing about the heartache or the true cost of being a business owner in what they had read online.

Change this scenario to a salon owner, health practitioner, whatever scenario you like, the outcome remains the same.

This is something Paul and I hear so often, whether it be a service based business, bricks and mortar, or product…the problems remain the same.

Cash flow up and down, no real strategy (lots of ideas, with little or no action) because there is no time to work on the business because all the time is spent IN the business…a poor business decision based on not enough strategy and due diligence.

It’s frustrating to listen to the stories, let alone live them.

Smart people, with a bad idea…or worse, no strategy at all to back up the decisions made.

Now the worst part of this dismal tale, is that John and Mary are so wrapped up in their current business model (although that is not what they call it), they cannot see how they can possibly find the time, to make small incremental changes in their day to day business, to massively increase their cash flow and life!

Time…

In fact, it is hard to watch these people who ‘see’ the value of building a business using social media and do nothing about it…and I mean nothing.

Smart people who choose to take no action.