The Pain of Business Mediocrity vs. the Glory of Business Success

By Russ Allred, MBA

Ninety-five percent of startups fail within five years. The pain of business failure can be awful; but there is another pain that affects many businesses: the pain of business mediocrity. The dull, lingering torture of mediocrity can be just as soul-crushing, only the pain lasts much longer.

The ache of business mediocrity becomes more acute in the summer when your peers are cruising Alaska, during the holidays when your friends with jobs lavish expensive presents on their loved ones, and during those momentous family events like weddings or anniversaries when you want a little extra money for a special gift.

Business mediocrity extends your working life because you can’t afford to retire. Paying the bills is a poor substitute for success. It offers a life without the luxury of security. The owners of mediocre businesses hardly realize their plight because their nature is nurtured by hope. They always believe that things will get better, the government will back off, employees will show up, sales will increase, and equipment won’t fail.

Every new knock at the door or phone call could be the sale that covers their monthly nut. More often than not, they pay the bills, but there’s rarely anything extra. Once, these intrepid entrepreneurs dreamed of glory, money in the bank ,and Caribbean cruises; now they are content when their worries don’t wake them at night in a cold sweat.

These proactive patrons may listen to learned advisors who teach them how to advertise on Facebook, optimize their websites, rev up their persuasive vocabularies, and close the sale. However, incremental increases won’t sufficiently change their income.

Implement Strategies That Promote Growth

A wary partner in a citrus packing company once said to me, “We do $3 million in sales every year. You don’t know a thing about our business. What can you possibly do for us?”

I delayed my reply with a few questions, “When was the last time you took an extended vacation? Will you have enough money to retire? What would happen to your business if you couldn’t come to work for a few months?”

As an adjunct business professor and a successful entrepreneur, I know a few secrets. The first is that a business education is for managers not owners. Professors teach students how to follow rules and promote modest growth. High-performance entrepreneurs implement strategies that promote exponential growth.

I showed the citrus packer those strategies, and 10 years later his company is doing $30 million in sales, has multiple plants, employs managers to do the daily work, and is considering how to invest its multi-million dollar pension accounts.

Set a Big Hairy Audacious Goal

Another secret is that it all starts with a "Big Hairy Audacious Goal," as Jim Collins published in his book Good to Great. Contrary to the vision statements posted and forgotten in lobbies across the county, big goals have to be concrete.

One goal you could make is to earn five times current revenue in less than five years. A time limit is important because it takes 20 years on average to develop a sustainable business, and you could die before then. Many entrepreneurs who make that their goal soon realize that they can’t get there with conventional management practices or sales techniques, and they can’t do it alone.

Once a goal is set, the company's management team should decide on a strategy that will generate that growth, such as, innovating new products, organizing the right personnel, updating equipment, expanding the service area, bidding bigger jobs, acquiring other businesses, strategic alliances, and exploiting the value chain.

Rapid growth must be regulated with policies and procedures. One entrepreneur protested the implementation of such rules saying, “It’s just me. Rules would limit my creativity.” That may be true, but quintupling a business requires more people. Policies are designed to protect the owner from the creative efforts of personnel who might put profits in their own pockets.

In the end, a goal should deliver that glory you envisioned when you began your business: money in the bank, free time, a secure retirement with respect for self and from others. However, making lots of money is worthless if you lose your soul in the process. The path to profitability can be achieved with a good reputation. Glory is fleeting if obtained by abusing others.