Stuck businesses are characterized by stagnant growth, inconsistent cash flow, and an over-reliance on the owner, who struggles to delegate and implement effective management systems.
Primary Implication
A stuck business is stuck because they have an owner who is unable to let go. Because they are not willing to trust others to complete a task or let them learn from mistakes, the business is constrained to the talents, skills, energy, and interest of the owner. The less time a stuck business owner spends managing because they are too involved in resolving problems, the more likely a stuck business will drop into the survival stage on their way out of business.
The best way to get unstuck is to stop doing what’s always been done while profits decline and cash disappears because of not knowing any better. Identify what you need to start, stop, or do differently to create the change needed to earn higher profits and more stable cash flow.
Overview
Stuck businesses are doing what’s always been done because of not knowing any better.
A big reason why businesses become stuck is that the owner is too involved in resolving problems. Couple this with their inability to let go because they aren’t willing to trust others to complete a task or let them learn from mistakes keeps the owner in the doing mode. The more they do because they don’t trust others to do what needs to be done, the more likely they are to bounce between the survival and stuck stages.
Owners in the stuck stage experience cash to be tight more than it isn’t. The good news is they have more good cash inflow weeks than outflow yet little cash reserve to draw from. Their uneven cash flow from operations creates stressful periods trying to stay up with equipment leases and trade payables. As for new sales, it is more by luck than any consistent approach to finding new customers because tight cash is a never-ending problem.
They could improve their cash position if they looked at their P&L Statement more than once a year when taxes are filed. They would also have more cash in the bank if the owner became more interested in using metrics to manage the business versus gauging business viability through daily bank statement checking. A look at the Balance Sheet will show that Owners’ equity is a fraction of liabilities with very little in current assets and inaccurate accumulated depreciation.
Stuck businesses have between four and fifteen employees with an operations lead and office help. The owner does most everything of any importance to the business. Their strategic focus is to work fewer hours for more money. They use QuickBooks Online to create invoices and process checks.
Businesses that remain stuck have owners that struggle with getting work done through other people. Their inability to let go of doing by delegating is what keeps the business at this stage.
