Kill your own business

Plot your business' downfall - so your competitors don't get there first.

Few will forget the images of Ken Livingstone, David Beckham, Denise Lewis et al jumping for joy as the Singapore meeting of the International Olympics Committee drew to a close on June 6, 2005.

The London team had gone against the odds to beat New York, Moscow, Madrid and favourites Paris, and cement its place in sporting history.

Each chain is only as strong as its weakest link, and there's every chance that link could break.

The success was widely attributed to Lord Sebastian Coe, an ex-Olympian himself, whose strategy was so effective the Mayor of Chicago has approached him help the city secure the 2016 Olympics. But what was Coe's secret?

According to Jeremy Starling, managing director of 'experiential change agency' Involve, it was all down to how heavily the London 2012 team scrutinised its own plan. "They pretended to be France, they pretended to be Russia, they pretended to be Spain," he explains. "Then they tore their strategy to pieces and put holes in it."

Starling's business helps companies, including several major financial institutions (he won't name any, for obvious reasons) to motivate their employees by doing exactly what it says on the tin - feel more involved in the company and its strategies. He says one of the major ways to do this is by holding 'destroy your own business' workshops, where senior-level management get together to spot the weaknesses in their own strategy.

"You spend a day immersed in a particular competitor. You go into a room, you've got all their latest advertising, market share, offers - so you become an expert on that particular competitor," he explains.

Starling says looking at their own company from a competitor's perspective gives his clients a very clear idea of exactly where their weaknesses lie.

"Later on, you have a discussion about how you, as a competitor, would be able to wipe out your own company. At the end of the day, you have a very clear idea of where your strategy is weaker and where you're exposed to competitors - and the potential moves they might make."

If you think you'll find it difficult to look at your business from a competitor's viewpoint, look inwards - Starling says many businesses don't realise they can get that perspective from their staff. "Your people know a lot more than you think they do. A lot of them will have come from competitors," he says.

It's not just competitors you need to look at when you're assessing your weaknesses, though - as Colin Gibson, a partner at insolvency law firm Rickerbys LLP, testifies. Predictably, he says one of the biggest weaknesses he sees in businesses is cashflow.

"You should have a plan with cashflow forecasts, so hopefully you can say, 'this month, I know the company will have business of x thousand pounds'. If it comes in as less than that, that's a first warning bell."

Gibson adds that one sure-fire way to see your business collapse is by putting all your eggs in one basket. If you find yourself relying on one major customer, if they go down, you're going down with them.

"If you do 95% of your business with one customer, you have to make sure you put some credit control system in place," he warns.

Look at how your business responds to late payment as well. If you aren't assertive enough, you lower your chances of getting paid on time.

"In this day and age, emails are the easiest way out. They help you deal with things, because it moves the job off your desk but avoids confrontation. You really can't beat a phonecall, though - if they avoid you, if they say 'I'm sorry, such and such is out' more than twice, alarm bells should start ringing."

One major factor which could kill your business stone-dead is a breakdown of relationships with suppliers. If you don't have suppliers, you may not have a business - and again, it's a case of making sure you don't put all your eggs in one basket, advises Gibson.

"You should be looking around at an early stage. Once you've established one relationship, is there anyone else who can supply the goods you need? If you haven't got the supplies or the raw materials, you can't produce the products, and if you can't produce the products, you can't service your clients - and if you can't service your clients, you're not going to get paid.

"There should be penalties on contracts for late delivery, because it's a chain reaction," he adds. "Each chain is only as strong as its weakest link, and there's every chance that link could break."

Although it might sound like a strange approach, Starling says there's no secret to plotting your business' downfall. "It's just about stopping and taking a good hard look at what you're doing in the marketplace.

"The main thing with the workshops is they give leaders the time and space to stop and think. It's actually a very powerful way to get a step ahead of your competitors. It's amazing the benefits it has."

Smarta Business Builder

To help you on your business journey, we've created Smarta Business Builder, the complete online tools package for growing your business. Website Builder, Business Plans, Accounting Software, Legal Documents and Email - all in one place - from just £20 per month with no contract! Try it out today.