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How to make a business fail

Lessons from the frontline

12:08 am on Dec 2, 2008 (gmt 0)

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I've been thinking about this subject a fair bit lately, partly due to a nasty recent experience [webmasterworld.com]. For those of you who offered advice, I'm happy to say that I've moved on to a different outfit, and managed a 50% pay increase from the experience - and I'm doing WAY more interesting work.

Now, making a business fail is easy, and you don't actually have to put any effort into it yourself. Macroeconomic conditions can sneak up on you, competition can blindside you, a single rogue employee [en.wikipedia.org] can empty even the biggest pockets.

But if you actually want to make a business fail, here are some tips and tricks from things I've witnessed over the years. Now, any one of these things might not be enough to make your business fail, so try different combinations out. Usually, if you combine two or three of these things together, you can successfully tank even the hardiest of enterprises.

1. Make your business plan as vague as possible: Details are for wimps. Fly by the seat of you pants and make everything up as you go along. Mission statements are a great start here - "We're in the business of quality provisioning." Don't mention what you're provisioning, how you're going to provision it, or exactly how you define quality.

2. Change your business plan often: If you made the mistake of creating a reasonable business plan, make sure you change it often. Weekly if necessary. It keeps the staff, and your customers, on their toes, constantly guessing at exactly what the heck it is you're up to.

3. Cost analysis is for wimps: Cost analysis is such a downer. Concentrate on your "projected revenue stream" - that's a much happier number. By doing this you will be able to completely avoid realizing that you're spending $2.00 to make $1.50

4. Be absent: Just because it's your business doesn't mean you actually want to show up. Pop by once a weak or so just to remind yourself of how to get there and open the door, in case you need to loot equipment, office supplies, or the staff coffee fund.

5. Never answer the phone: and make sure your employees understand that lowly peon staff shouldn't be talking to the outside world either. Customers are annoying, all they ever want is stuff or service, and that just leads to more work for you. Vendors are even worse. Sure, they might send you stuff, but they always want something in return. Usually money. Dag nabbit, you worked too hard at doing nothing for your money, why should you just "give it away" to people who send you stuff?

6. Avoid dealing with emails: See above.

7. Finance Everything: That's why God invented the charge card. Get lines of credit from the bank, Venture Capital, Angel Investors, hit up Mom, Dad, and every friend or relative who'll still answer your calls. You're a man of action, an idea man, why the heck should you put your own money on the line?

8. Make your "personal assistant" the highest paid employee: And by "personal assistant" I mean mistress/boy toy. You wouldn't want your husband/wife to realize just how much money your throwing at your fling on the side, so support your affair with company finances. Sure, your staff are going to figure out that the highest paid employee is someone without any real skills, doesn't do any work, and shows up about as often as you do (and usually in the same vehicle), but that's none of their problem.

9. Skip paychecks intermittently: Nothing says disloyalty more than that bugger who takes off the first time you fail to make payroll. Dagnabbit, you have a VISION, and if your staff can't go hungry for your vision, then you just don't want them around. Make sure you do other things, like spring surprise unpaid "downtime" on them. They'll appreciate an unscheduled week off without pay.

10. Delay expense reimbursement: Truly loyal staff will be happy to shell out their own cash to keep the business going. The longer you stall reimbursing them, the happier they'll be.

11. Buy nothing but the best: for yourself. Your staff can get by on whatever supplies they can beg or scrounge from the alley behind your shop. But you, you're a man of vision, and deserve nothing but the best. Use company finances to lease expensive vehicles, buy matching 52" plasma screens for you and your mistress/boy toy (see #8), and import exotic knick-knacks from overseas. You deserve it.

12. Book-keeping is a pain, so why bother? Numbers make your brain hurt, that's not what you went into business for. Keeping track of invoices, accounts receivable, accounts payable... Who cares? It's all going to balance out in the end, right?

13. Involve as many staff as you can in shady business deals: Everyone sells containers of e-waste to China for beer money, there's nothing wrong with it. Changing date codes is just business as usual. And all that "discount equipment" you bought off Tony the Twitch? Get your staff to help unload it. Any staff who quit over a crisis of conscious, well, you didn't want them around anyway. Make sure you threaten them on the way out the door so they won't report you to the authorities.

14. Constantly question your staff's loyalty: Pick on one person every time you show up and question their loyalty in front of the rest of the staff. Works wonders for morale.

15. Divide and conquer your staff: Make sure when you're one on one with a staff member, you buoy them up, and cut down all the other staff. It's not like your staff hang out together, work together, and swap notes. Keep them in a constant state of distrust of each other.

Did I miss anything?

Remember, anyone can repeat successful habits. It takes grit to learn from your mistakes, and the mistakes of others.

12:04 pm on Dec 7, 2008 (gmt 0)

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What a fantastic thread. It's amazing that all these points seem so obvious when written down, but it never ceases to amaze me that start-ups continue to fall down these holes.

Never underestimate the power of flexibility.

I think that's OK from a business plan sense when you have a crystal clear vision and have articulated that vision to your staff (and they get it). In that case flexibility is not about moving the goalposts (which I think is what Grelmar was alluding to), it's about moving the lines in between the goalposts, and that can work fine.

The risk with that strategy is you spend your VC cash and run out of runway moving lines and you never reach target. Strong leadership skill and an agile team can pull you through that but it's not for everyone.

12:07 pm on Dec 7, 2008 (gmt 0)

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43. Focus on management, forget leadership
Stick to the status quo and ensure people stick to the existing business plans even if everything else has changed.
2:36 pm on Dec 7, 2008 (gmt 0)

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Related to #27:

44) Hire lots of contractors (when you could hire f/t employees for 2/3 the cost), then give them full rein to manage themselves AND your employees.
It's a gift that keeps on giving - they'll keep your employees as uninformed as possible and create plenty of reasons to keep themselves around forever. Just leave them alone do their thing - the less you know the happier you'll be. Great for employee morale too (not!).

5:25 pm on Dec 7, 2008 (gmt 0)

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Related to 44:

45: Break the project down into tiny pieces, and hire a different contractor for each piece. Hire a separate contractor as "Lead Systems Integrator," then yet a different contractor to handle overall project management.

You don't see this very much in the private sector, but it's a favourite method of the government. We all know how efficient and cost effective government projects tend to be. It allows you to spend all your time golfing, while giving you a target rich environment for blame when the whole thing collapses on itself.

8:26 pm on Dec 7, 2008 (gmt 0)

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46: Don't read and/or ignore brilliant threads like this one.
3:28 pm on Dec 8, 2008 (gmt 0)

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47. Force your employees to do business with incompetent and brutish service providers just because they are members of your religious community. Pay no mind to the fact that people who actually worked to get to where they are do not want to work with losers.

48. Do the absolute minimum for your employees and make sure to fire at least one a week during the down season. Act surprised when those same employees don't stay late or come in early.

3:49 pm on Dec 8, 2008 (gmt 0)

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43. hire a chief marketing officer that comes in just to have lunch at his desk

true story

5:14 pm on Dec 8, 2008 (gmt 0)

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49. Hire a programmer/designer/expert and make sure they do things EXACTLY as you would have done. On no account let them advise you on the best way to do things based on their experience and expertise.
5:22 pm on Dec 8, 2008 (gmt 0)

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No 49. - Amen to that one - it's what I seem to suffer on a daily basis! The "just do it" brigade and I don't mean the famous running shoe makers!
5:24 pm on Dec 12, 2008 (gmt 0)

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This is briliant, good job Grelmar!

Funny coz it's all true!

6:32 pm on Dec 13, 2008 (gmt 0)

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43. Make sure to follow all protocols of Political Correctness and rather than giving your best people raises, throw lots of parties and incorporate things like “Diversity Training”.
This 41 message thread spans 2 pages: 41

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