Reinvesting in your business is a crucial component for any company that wants to grow and scale. It’s interesting that when we ask folks across industries what percentage they are allocating toward reinvestment, they typically state: Whatever is left over or whatever I can afford. There is no clear-cut plan or objective.
What’s holding business leaders back?
The truth is that many business owners don’t have a plan for reinvesting in their business so it can grow and scale. And a phenomenon you’ve probably heard about called, “shiny ball syndrome” is often to blame. It’s a continual propensity to go after the next big thing. Maybe it’s innovating a new product, pursuing joint ventures, adopting new technology, or jumping on a new social media platform.
This phenomenon often extends into an owner’s personal life as well. The more money you make, the more money is spent on things like vacation homes, boats, and other toys. The problem inherent in the shiny ball is there’s always another one. And it’s human nature to feel FOMO if you don’t go after the next big thing, especially when you’re an entrepreneur. That’s where businesses are getting in trouble.
The hazards of shiny ball syndrome
In the simplest terms, following shiny balls can damage your business. And it’s tough out there.
Data from the U.S. Bureau of Labor Statistics show that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. These statistics haven’t changed much over time, and have been fairly consistent since the 1990s.
Why do businesses fail? There are a few primary reasons, including lack of funding, inadequate leadership, and competition. But another big reason businesses fail is a lack of planning for the future. Businesses that don’t have a sound plan in place to mitigate various marketplace risks are more likely to fail. That’s why business owners need to think differently about chasing the next great opportunity—and refocusing their energy on sustainable growth.
That begs the question: How can business owners avoid shiny ball syndrome to build and scale their businesses?
Get smaller to get bigger
Every business owner has things that they won’t let go of to grow their business. They may be physical items, collections, luxuries, or even beliefs. It’s not always easy to realize, but once you are able to let go of some of those things, you free up time and money to invest back into your business.
Remember that reinvestment doesn’t only include monetary values. You also have a reinvestment strategy for your time as well. For instance, when you have X amount of dollars, you can buy back your time to have other people do the work that you shouldn’t be doing (the $20 an hour work versus the $200 an hour work, for example).
Remember: You can’t always figure everything out for yourself. These are the types of challenges our coaches help business leaders overcome daily.
TWR can help you get there
TWR’s coaches help leaders like you succeed, so you can work more productively to build a plan to reinvest in your business and scale. Remember, the seemingly easy things to change are not always easy when you’re a leader. That’s why so many owners and managers fail to do them. TWR can help you overcome barriers to quality leadership with proven strategies that allow you to better connect with employees—and manage your bottom line.
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