Sunday, 23 June 2013

What happens when your business runs out of its runway?

Several months ago we faced some serious challenges. We set out to launch an online jewellery business that would be a game-changer and sell our products around the world. We continue to be optimistic that we are on the right path to achieve this. What we hadn't planned for was what would happen if we didn't manage to get the business off the ground before we ran out of money.

When the online sales didn't come as quickly and frequently as we had hoped, we had to (and in particular "I" had to) ask ourselves some very serious questions. These were:

  1. Are we sure we want to continue pursuing our vision and the idea we had for our business in the first place?
  2. If so, how are we going to afford to keep the business on its feet until it becomes profitable?
  3. What changes do we need to make to ensure we achieve our goals more efficiently?
Most importantly, I learnt something SUPER important when trying to answer these questions: To get REAL answers that can help us as a business and team, we need to face REALITY.

Reality however was something I had not been able to face until then. I believed so much in our passion, drive and ideas, that I did not realise that we were just a few months away from loosing our business. Unlike some of our competitors, we had not raised millions in funding and, it seemed, to get a converting jewellery e-commerce site in front of many thousands of potential clients, we would need more time, money and people. Reality eluded me, and I refused to acknowledge that changes were necessary, NOW!

Thanks to my friends and business partners and their support and brutal honesty, we did manage to finally sit down and speak openly about what was going on and what we were now going to do. So what did we do? We decided we did want to continue towards our initial goal, so we now needed to answer question 2 - HOW to make enough money to do so. Our answer at the time was: Vertical Integration. Over-night we put the online businesses on hold and invested all our time and remaining funds into growing our wholesale business-to-business operations. Six months later, this part of our business pays all our salaries, is profitable, covers all our overheads and what remains is invested into our online projects which we are finally committing time and money to again.

This left us with answering question 3 - WHAT changes needed to be made. We changed so much over the last 6 months, but if there is one thing that stands out it is our efforts to regularly "keep it real". Keeping it real is thinking about the challenges of our business, without using some magical fairy tale goggles and seeing things for what they really are. This includes, at times, detaching ourselves from our emotions or our egos and making hard choices when they need to be made. 

The ups and downs are never-ending. The important thing is to know when you are on a down, and to find a way to quickly make the changes necessary. Nothing is worse than pretending that you have an amazing business just to feel and look better, when what you are really building is a massive money-sucking black hole.

So what happened when our business ran out of its runway? We faced the music, made some difficult decisions and in the end, literally started a whole new business which has ended up being the cash cow to our original vision, which we are now once again pursuing with excitement and conviction.  

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