Business Failing? Stop Everything And Watch This

A lot of founders think that their business is dying because of the economy or the algorithm or some outside force that they can't control. They're wrong. It's almost always one of these 3 specific clogged pipes. Yes, clogged pipes that I'm going to show you today. If you don't clear these pipes in the next 30 days, you might not have a business in the next quarter. So in the next 10 minutes, I'm going to help you determine whether your business is actually failing, whether it's worth saving in the first place, and if it is, exactly what needs to change. You owe yourself the next few minutes, so turn off all distractions because this might be the most important return on investment you will get all year. The first thing I must address is that you are not alone. This episode actually comes from a listener, Steve, who wrote in with a question saying, "Is my business tanking? How do I know? And what should I do?" By the way, if you got a question you wanna ask, just send it over at 100mba.net/q. So if you're like Steve and you're asking yourself this question, there's your first sign, there's the first signal. We only ask ourselves these questions when we feel like there's something wrong in our gut. And the hard truth is, is that when there's doubt, there's no doubt. So let's go through the 3 steps I promised you. Step 1, let's find out if your business is actually failing. Here's the good news. This part is simple. Business is not mystical. Okay? It's actually just math. And if you're self-funded, meaning that you have no investors that are propping you up, the only number that actually matters is profit. How much money are you keeping? Not revenue and also not followers and not engagement. These should be signals that should lead to profit. Profit is the bottom line. If your profit is consistently growing, you're healthy, you're okay. If your profit has stagnated or declined for 2 quarters in a row, something is wrong, and it's declining fast. You are bleeding. And the worst thing you can do when you're bleeding is pretend that nothing is happening, to pretend that, no, I'm fine. So that is how you know if your business is failing. Bottom line: are your profits going down too 2 quarters in a row. Step 2 is find out why is your business failing? And like I said, it's only one of 3 things. More good news, right? There's only 3 things, not a million things. Here are those 3 things: your economics, your product, your acquisition. Those 3 things will dictate the success of your business. That's it. Not bad luck, not the algorithm, not the market. Let's break them down. The first one is your economics. Your economics are broken if your margins are thin, you're not making enough profit, if your costs are too high, if you're underpricing yourself, if you're overstaffed, if you're spending too much on ads, for example, and not getting a return on investment. You cannot outwork bad math. This is something that I had to learn the hard way. I never thought I was a numbers guy until I became a numbers guy because I was forced to, because the numbers matter in business. It is business. If your customer costs you $400 to acquire and you only generate $300 in profit from that customer, you're digging a hole. You're just dying a slow death. So what do you do in this situation? What do you do if your numbers don't make sense? If your math doesn't make sense? If your economics are broken? Well, here are some things to look at first. Number 1, your prices. Maybe you need to raise your prices. Number 2, cut expenses ruthlessly. Sometimes you need to cut expenses drastically in order for you to start being profitable. Listen, when your back is up against the wall and your business is dying and you are forced to cut expenses, the first thing you start to feel is relief because you start to realize, oh, I should have done that a long time ago. You need to cut every little thing that is not directly correlated to earning more profit. Maybe you need to improve your retention, how long you keep your customers or get customers coming back for more of your products and services. Maybe you need to simplify your operations. Maybe things are just too complicated and therefore cost costing you time and money. Listen, I've been there before where my business is just not working economically, and I had to make some drastic moves. I remember vividly that week when I realized this. I cut my expenses by 20% in that moment, and then eventually got cut by 40%. So this is not sexy, this is not fun, but neither is bankruptcy. You don't want to be there. You want to save your business, so do whatever you got to do to make sure the numbers make sense. And I know you might break some hearts, meaning you might have to let go of some people on your team, you might have to cut off some vendors that you don't need, and some relationships that you maybe built, but you have nobody to serve if your business goes under. If you can't survive, then you have failed as a leader because your job is to survive. Your job is to thrive the business, to keep it going. And if you don't do what you need to do, then you have failed. And part of that is sometimes is making tough decisions. The second reason why your business might be failing is your product. This one will hurt a bit. It will hurt your ego because if customers don't stay, if they don't refer you to other people, if they don't come back for more, if they don't rave about you, your product is just not strong enough. It's just not good enough. It's not a need. It's maybe a nice to have at best. And what I've learned is that you can't market your way out of mediocrity. If you're constantly grinding for sales, if you're constantly chasing, if you're constantly feeling like you have to convince people, your product isn't compelling enough. I'm telling you, I've been there so many times where I had to just admit my product's not good enough. I need to get better. What does a strong product look like? A strong product creates a win for your customer fast. They get immediate relief to the pain that you solve. It solves a really painful problem for them, something that they really don't like living with, and you're doing them a huge favor with your solution. It delivers results consistently, so it doesn't just happen or work sometimes, or, you know, if the season's right, if the weather's right. No, it delivers results no matter what. When your product is 10 times better than your alternatives, growth feels easy. It's light, it's simple, and your business starts to feel like a pleasure. So if your business is failing, ask, would I buy my product at this price? And be brutally honest. Maybe you're just not that valuable. And the easiest way to justify any price, if your product is $1,000 or $50,000 or $1 million, is you increase the value. The higher the value, the more you can charge. The third reason why your business might be failing is your acquisition. You are selling to the wrong people. For some reason, this is where founders get it completely wrong. They just forget about this. They think acquisition just means getting more traffic or getting more conversions or running more ads or posting more content. No, acquisition is not just about getting attention. It's about getting the right attention. If your audience doesn't understand what you offer and they don't see the value in what you offer, and they don't actually have the problem that you solve, or they don't realize they have the problem that you solve, then you are talking into a void. This is wasted time, energy, and money. You need to be speaking and positioning yourself and your product in front of the right people, the people that actually want and need what you have. And when that happens, everything feels much easier when you're doing it right. When you're not doing this, it feels really hard. You feel like you're convincing people, you're chasing people. You feel like you're dragging people across, you know, the finish line. Please come on, get over here and buy. That's not a marketing problem. It's an audience problem. If I was selling special equipment that dentists use to clean teeth to a pediatrician, then there's a mismatch here. Yeah, I'm a doctor, but I don't really care about this problem. I'm not trying to clean anybody's teeth here. So you need to ask yourself, who specifically gets the most value from what I offer? Listen, there's going to be people that are going to get some value from what you offer. They might think it's a good idea. They might think this is kind of cool, but who will get the most value from what you offer? Who feel like this is amazing, that feel like this is a no-brainer, that this product will solve a real problem. That leads to the next thing I got to share with you. Who already believes in solving this problem? Who is actually committed and is already trying to solve this problem, but your solution is actually the best solution to this problem? Who is actively looking for the solution? You know, they've tried some other things and just not working, but your thing might work the best. Because what I found is that when you're selling to the right customer, sales conversions become easier. Let me give you a real good example. One of my first businesses was I had a custom tailored clothing line for men. It was a clothing line that people can send in their measurements and that they can get custom tailored dress shirts, casual shirts, so that way they can fit perfectly in their new clothes. Now, in the beginning, I was selling my product to all men my age. At the time, I was in my mid-20s. Then I realized that not all men will love this solution, are actually going to get the most value out of the solution. And I realized the people that actually will get the most value are people like me who are quite tall and long and have long arms and need custom tailored clothing, right? They can't just buy a shirt off the rack at a department store because sometimes the neck is too small or the arms are too short. So those people will really love my product. Not every man is going to love my product. Yeah, maybe they'll look a little nicer in my shirt, but they could get a shirt that fits them properly in another store easily. Like there's other options for them to solve this problem. But for people that are tall and slender or big or have a unique body body shape, my solution is the best solution. So when you have that match, objections really shrink, conversion rates rise to the ceiling. Okay, once you identify the right audience, then and only then do you start to scale. Then you focus on a steady, repeatable way to reach them. Then you really focus on a clear message that speaks directly to their pain, these specific people, and they feel like you're speaking directly to them because you are. And then you start to simplify the path to try your offer. It's easy for them to find you and to start using your product or service because you're speaking their language. You are speaking directly to those specific people, and you can scale your efforts by speaking directly with them through a webinar, through targeted content on social media, through paid ads that are aimed specifically to the specific niche, through partnerships inside of that ecosystem of— like in my example with the tailored clothing, like the big and tall, You know, for example, I could have partnered with a basketball organization because people that play basketball sometimes are a little bit awkward shape and long arms and big bodies. But here's the kicker. The order actually matters. You need to first make sure you know who you are targeting. You have the right customer that gets the most value out of your product or service. Then you have to craft a clear message for that specific person. And then you need to consistently acquire this person or this type of person. So you have a consistent acquisition system. If you skip step 1, where you identify the specific type of person that gets the most value out of your product, no amount of marketing will save you. Trust me, I've tried. I tried to market my way out of that. Businesses don't struggle because they can't sell. They struggle because they're trying to sell to people who don't care. Find the people who care, then scale. By the way, if you're finding this kind of straight talk helpful, I encourage you to subscribe to the podcast because I'm working on an episode that's all about how to use AI. I titled it The Ultimate Guide to AI for Normal People Like You and I. In that episode, I walk you step by step how to use AI to improve your offers, tighten your messaging, how to analyze your numbers, and how to just make things a little bit easier for you. AI isn't a gimmick, it's real leverage, and leverage is what turns things around fast. So make sure you subscribe so you don't miss that episode when it comes out. I can't wait to publish it. Been working on it for a while, so you're going to absolutely love it. All right, let's get to the next part, the next step, where we ask ourselves the question, is your business worth saving? Wow, that's a real question. Now, here is how you know it's worth saving. If the market demands what you're offering, there's a market demand for the solution you're trying to come up with. Maybe your solution is not perfect yet, but there is a market demand. Do customers still care about this problem? Do you still care? Is the core idea still solid? Is the problem that you're trying to solve a real problem? If so, it's still worth saving, but you need to refine what you're offering and use everything I shared with you today to help you refine that, right? All the things that you need to cover, make sure that those things are in check. Now, it's not worth saving if you hate the business, right? If the market has shifted permanently, if the margins are impossible to fix, If you're emotionally attached but strategically tapped out of trying to improve this business, sometimes the bravest move you can make is to pivot. Sometimes it's to shut it down and to redeploy your skills somewhere smarter. Remember, you are not your business. You can start again and you can rebuild and you can redirect. And I've started 20 businesses. 17 of them failed. The lessons from those failures funded my successes. And the thing about business and the thing about entrepreneurship is that you only need to be right once. You only need to succeed once for it to change your life around. Now, if you are going to save your business, I want you to do this immediately. Pick one of the three problems to start working on. Now, maybe your business has all three problems, right? Like the economics and the product and the acquisition, right? The people you're serving. Pick one, fix that first, ignore everything else. Okay, do not try to rebrand and launch something new, or change your logo or start a podcast or redesign your website or have some sort of new marketing scheme. No, those are not any of the things I mentioned. Okay, I didn't mention any of that stuff. I said it's either your economics, it's either your product itself, or it's who you are serving, the audience you're going after. Who you're trying to acquire as a customer. All these other things I mentioned, all those little tactics, that's panic behavior. Instead, if the economics are broken, fix by fixing your pricing, raising your rates, or cut costs this week. If your product is weak, improve the delivery immediately, right? Do something right now to improve the experience. If your acquisition is low, focus on finding the perfect customer for your product and go after them. One lever at a time. That's how you turn it around. Before I go, I want to leave you with this. Business isn't about working harder sometimes. It's about working on the right thing. Every failing business has some sort of bottleneck. Find it, fix it, learn from it. See the result of fixing it. Maybe you need to readjust again and repeat. If you don't fix that constraint, no amount of hustle can save you. Okay, just trust me, when something's broken, it's not going to just fix itself by you working harder. You got to fix that problem. If this episode hit home and you're realizing your business might need some serious adjustment, then the next thing you need to understand is growth is not optional. This is why I recommend you check out one of our previous episodes called The Growth Rate Most Businesses Should Actually Aim For. I give you a specific number that you should know like the back of your hand, that is your growth rate, so that you understand if you're growing fast enough, if you're growing healthy enough. Go queue up that episode right now so you don't miss a beat and you keep on growing. Let's build something worth fighting for. I believe in you. Let's make it happen. I'll check you in the next one.