Success Can Kill You
Almost 50% of businesses fail in Australia within the first three years.
The simple answer to that is two words: cash flow. When your business is growing on a huge hockey-stick line like mine did, you start to realise that the bank account is shriveling up. The main reason for this is if you have a certain amount of product that you’ve got to supply, you only need to buy a certain amount. But when all of a sudden the demand increases, you need to buy more products to install.
Then you start to realise your bank account’s shriveling up, because you’ve got to outsource more materials, pay for more materials to be installed, plus you might see your overheads increase significantly.
One of the big things that really, really crushed me was trying to gather capital as I just hockey-sticked and grew so fast. I needed to start finding out: how the hell was I going to get all these systems installed in such a short amount of time so I could get the money in the bank straight away to buy the next lot of products.
I was doubling month on month, which meant I needed to pay for more installers and more materials. It’s a really good problem to have, but it’s also a crippling problem. And it kept me up at night, I nearly killed myself, nearly lost all my employees.
I was in a position where I was actually taking money from my personal bank account, putting it into the business account so I could pay wages the next week. But on paper I was a $20 million company. It’s a very fine line that you need to play.
Don’t Bite Off More Than You Can Chew
A lot of people get too big too quickly too soon, and that’s the downfall where success can actually kill you. You need to have a strategic approach, you need to have an accounting hat on, you need to start working out the ins and outs of your business and how much you can afford.
Remember: you don’t want to start running too soon. You need to start with the baby steps, start walking and then start to run a little bit faster – then you can start to sprint. I’m not telling you to hold back, I’m telling you to get a systematic approach, get some planning in place then let’s crush it!