About three years ago Neil Bailey and myself were asked to go into a company and see if we could provide advice on their problems. It was a multi-million pound turnover company, of long standing, who were now losing quite a bit of money.
It soon became obvious they were doing what most others in their industry were doing – financing expensive new machinery to produce more items at greater speeds in order to offer cheaper and cheaper prices whilst still going backwards.
We tried explaining this and saying they had to think differently, look at other markets and ways of doing things or the business would, in all probability, fail in the not too distant future.
Unsurprisingly we never heard from them again and, sadly, they went into administration in 2019.
Investing to improve is something we would usually agree with but if your market is shrinking and your competitor’s capacity to fill the demand is growing then discounting follows and there will be a shakeout of the more lead footed businesses.
What you need to do is take step back and ask yourself ‘does what I am doing make sense?’ If you are personally too close to the business and, to be fair, most are, then you need to get outside help though consultancy or mentoring.
The one thing that won’t work is doing nothing!