“There’s no such thing as failure, only feedback,” says James Sinclair who, in this instalment of our Business Class video series, shares his experience of buying a business and struggling to make it commercially profitable.
In the video, James outlines the problems he encountered on his journey, and some of the big lessons to come out of these challenges.
For example, he discusses the importance of managing overheads and ensuring great access to your business – both in terms of location and transport links, but also in terms of online access. In other words, can customers easily find what they need on your website and do you offer the kind of dispatch and delivery speeds that they require?
James also touches on recruitment and retention – outlining the difficulties he faced finding people with the right skills and identifying solutions to high staff turnover – before turning his attention to management.
Keep watching, as James identifies the most common internal and external barriers to business growth and offers solutions on how to overcome them.
Sunk costs, opportunity cost and moving on
Ultimately, there may come a time when you need to write off your sunk costs and move on to a more profitable venture.
James explains how his monthly profit and loss statements led him to ask: is it time to call it quits?
It’s a question that can only be answered on a case-by-case basis, but to kickstart the conversation, James suggests identifying your opportunity cost. This means assessing what it costs you by “not putting your effort and energy into other parts of the business”.
Often, business owners have to choose which projects to pursue – for example, investing in a new production line or expanding to international markets – and being able to calculate opportunity cost can help guide these difficult decisions.
For James, the solution was to direct his and his team’s time elsewhere, as he acknowledges: “Great entrepreneurs use their time as effectively as possible. And what I’ve learned over the past 20 years is that there’s no such thing as failure and that you’ve got to make some mistakes along the way if you want to be seriously successful.”
Find more of our Business Class with James Sinclair videos here.
