The Black Holes in your Business

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If you suspect that there are Black Holes in your Business

The Business Leaks Review is a focused look at where money and time is slipping out of your business - margin, stock, customers, costs, time. Find out more →

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One of the first business owners I worked with said something that has always stuck with me.

What was keeping him awake at night wasn't sales. It wasn't profit. It wasn't even cash.

The business was doing well.

What bothered him was something harder to put his finger on.

He knew there were Black Holes in the business. Places where money was disappearing. Places where profit was being lost. Places where the business was less efficient than it should have been.

He just couldn't see them clearly.

And because he couldn't see them, he had no idea whether the problem was €10,000 or €100,000.

That was the bit that worried him.

Where are we losing money that I don't know about? Are we carrying too much stock? Are some customers actually costing us money? Are our margins as good as I think they are? Why are costs creeping up here? What are we paying for that we no longer need? Where is all the time in the business actually going?

None of this was obvious from the monthly numbers he received so he spent many evenings trying to do his own diagnosis and analysis.

When you can see a problem, you can usually do something about it. When you can't, your mind fills in the gaps. You start wondering how big it is, how long it's been going on, and what else you might be missing.

Once we started digging into the business, the black holes got a lot less mysterious. We could see where margin was leaking. Where cash was tied up. Where costs had crept in. Where employee's time was going without much to show for it.

The conversation changed.

It stopped being "I know something's wrong, but I don't know what," and became "here are the three things we need to fix first."

That's a very different feeling for a business owner.

It's one of the reasons I believe in going beyond sales, profit and cash each month. Those numbers tell you the result. They don't tell you where the black holes are.

What do you suspect is costing your business money right now, but you can't yet see clearly enough to quantify it?

Sometimes the biggest source of stress isn't the problem you know you have. It's the one you suspect is there but can't yet see.