Why Businesses Go Under


For years, restaurants and home service contractors have been in competition for a rather uninspiring crown: the greatest number of business closings. (Hovers north and south of 20% per year.) This is never pretty.

A creative chef opens a restaurant with very high hopes, though he placed too much emphasis on the curry-flavored ice cream, and soon enough, it’s gone. Dashed dreams and a funky smell lay just inside the “closed” sign.

An aspiring technician decides he wants to do contracting “his” way, because his boss has the IQ of a sand flea, but with even worse people skills. He soon realizes that it’s actually helpful to sell something at a profit. He should’ve realized this before his truck payments were 6 months behind.

There are 3 legs to any business. Lose one and you lose out. People fall in love with the first one, dabble at the second one and generally fail themselves and the business by overlooking the third one.

It is the basics, the fundamentals, the process of working these 3 legs that spell success or failure. You will NOT find a successful business that ignores them.

I’ll cover the first two quickly, since they’re: a) Not sexy and b) I know enough about them to know I needed to hire people who understood them.

1. Technical Proficiency – This is about quality product, quality skills, production efficiency, the ability to do the “thing” you’re in business for. Great food at a restaurant, repair and installation from a contractor, brake and exhaust service from Midas.

If you fall totally in love with this item, you are destined to remain a “technician.” That is: the chef, copywriter, mechanic and candle maker… but business growth is not in your future, until you discover the next one.

2. Business Operations – This is the structure, the organization and the management of people, product, prices and profit. If it can be counted, it’s here: staff number, inventory, equipment, dollars, hours. It’s all input and output, with presumably enough left over to call it a living.

Obsession here leads to “system paralysis” where forms are created to keep up with forms, and there are meetings to discuss meetings. Though necessary, this part of the business has caused me to mentally create torture devices for the practitioners, none of which seem adequately painful.

Yet there won’t be any operations to fund, profits to count or technicians to employ
without this last one…

3. Marketing and Sales – Unless you’re selling door-to-door, the order is important. Sales come from leads, leads come from marketing. Every dollar you now possess or will earn in the future started as a lead. Not enough leads? You’re going out of business, just a matter of how soon.

Some goobers tell me, “Oh, I don’t do any marketing” and I want to see if I can detect light by looking in their ears. If you have a sign, a business card or visibly demonstrate good work, you’re marketing. Just depends on how much and how efficiently it’s fueled.

I was at a national conference this week, conducted a seminar and hosted an exhibit. Had perhaps 120-150 exhibit visitors. In fairly short order, your mind begins to “group” conversations and questions to create order, patterns and, you guessed it –

  • One group focused on tools, technicalities, the craft as god, regulations, the latest equipment.
  • Another group focused on management, pay plans, the organization as god, structure, hierarchy.
  • A third group had the first two things in place, but focused on “completing” the triangle with sales and profit. Our discussion turned to marketing and lead generation. Yes, many came to see the way to simply marketing while multiplying results (you can catch a glimpse here) but it was most interesting to see as we have all learned before that:

You get what you focus on.

So, expect our focus to shift this year.

Expect us to build more automated “push-button” marketing programs that generate leads so YOU can focus on being a contractor. Expect more services and offerings to take your business to the next level. Expect the same out of customer retention programs for you.

Adams Hudson
Adams Hudson