How to Close Your Small Business in 10 Easy Steps!

The economy across the globe is struggling. People are losing their jobs right and left. Companies are locking the doors everyday. Even with great management, it is proving to be a challenge.

Manufacturing businesses are more vulnerable than ever in this ever failing economy. There are only about 25% of manufacturers in the US doing ok. The rest are scrambling to secure their financial situations.

With sales orders down and all companies trying to save every dollar they can, control of much of your problems might be "out" of your control. However, there are many things that are not out of your control.

In order to weather the fierce storm we are in, all manufacturers are going to have to re-evaluate their entire operation.

Those of us associated with the manufacturing world, have sat and watched it slowly decline over the last 20 years. As countries across the world became cheaper places to do business, America has been forced to redefine what we do.

We were told we were the best in the World, yet the almighty dollar has ruled. The entire world of manufacturing is wondering what the future holds for America.
Everybody, everywhere is hurting. What businesses are left will have to be serious about looking at the heart and soul of their company. What are you going to do as a Business Owner to ensure that you can weather this situation?

There are at least 10 things that go on in a manufacturing business or lots of other businesses that are guaranteed to close the doors. If owners are not involved and are depending on others to run the business for them, these 10 things are almost guaranteed to be happening.

Do you want to keep the shutters open for years to come? Eliminate as many of these no no's as possible.

1. People who are not dedicated to saving you money every chance they get.
If you have people who are allowed to order things or just use stuff that you buy, Are they trying to save you money? Are all of things they order something that is needed for a project or for repairs? If you adhere to Lean Manufacturing, accountability for all orders should be followed. Record keeping is a big part of Lean Manufacturing theories.Record keeping should be a big part of "common sense". What was ordered last year and how was it used in making you money? Ask the questions....Everyone in manufacturing loves MSC, but the bills will come. If you don't need it, don't order it. If the people with authorization to order, have the nicest tools in the company, you may need to do some receipt comparisons.

2. People who are not participating in working.
How much time do the employees in YOUR company actually work? The big complaint in the auto industry was employees getting way too much money, for way too little work. Do you have people who spend more time standing around vs actually working? Are they really working or enjoying each others company on company time? Do they damage your equipment or cause losses because they are goofing off or not paying attention to what they are doing?

Who are the people that make the money for you? In manufacturing, there are key people who actually are valuable to your existence. Do you know who these are? These people should be on the top of your list for respect and money. The next people should be the average Joe's that come in everyday and do all they can to give you an honest days work.

The paper pushers and organizers should be on the list if they are actually giving it 110%. But the bottom of the list is where you need to start reevaluating. What job does each of these paper pushers and organizers perform?

Are they capable of contributing more than making a meeting or submitting a minor report? Is their job actually a necessary part of the business? Can you actually contribute project development or completion to these people? Do they have a degree that you are paying for, yet you can't put your finger on the significance of that degree for your business? Do they have a title but you can't quite pinpoint what they do? Do they carry a cup of coffee more than carrying their weight? Do they spend work time visiting with other employees or fraternizing on the job more than making sure quality products go out the door?

The higher rungs of the ladder need to be evaluated as well. Are your top people giving you their best? Do they spend their days making your business work better? Do they spend more time in their office than on the floor? Do their decisions make you money? Are all of your Supervisors on the same page for efficient operation and money saving, technology? Do your Supervisors keep up with the latest information on efficient operations? Do they know what they are doing? Are they working Supervisors or desk jockey Supervisors?

3. Poor Maintenance Department
In manufacturing, the Maintenance Department may be one of the most important sections of your company. Maintenance usually handles machine repairs and building stability. They insure the working parts of the plant are safe and properly set up. In this day and time, green should be a color the maintenance dept is focused on. Green means savings for you as well as a future we can all look forward to. Green maintenance means new technology and thinking. Many times, companies have a Maintenance Manager that has been doing it for 30 or 40 years. If he is allowed to be in charge without being educated on the newer ways of maintaining a manufacturing plant, antiquated thinking will cost money that could be better spent on other things. Keeping up with the new stuff is absolutely imperative.

Costly new machines that are not maintained properly or set up properly are destined to cost you tons of money in the end. The Maintenance Dept has more power than anyone else in the plant. If their job isn't done to the best of their ability and knowledge, the plant will always operate at a loss. Machines will always be Jerry Rigged and repair costs will continue to consume the budget. Another aspect of poor maintenance is the OSHA factor. If machines and building safety are not focused on with an adamant spirit, you may end up paying for lawsuits due to injuries or for OSHA violations that anyone can report you for. Do you know what the OSHA standards are? Or are you depending on others to be in compliance? Have you made sure you are in compliance? How educated are you?

4.Too Many Cesar's and not enough Romans
In manufacturing, you adjust your supervisor staff according to the number of employees, number of Dept's, etc. If you have 20-30 regular employees, you don't need 8, 9, or 10 Supervisors. You don't need teams. You don't need a Plant Manager. You don't need 10 individual departments. Managers and Supervisors who sit or are not actively out in the Plant for more than 3 hours a day, for a small company, are not taking care of their positions. They are playing BOSS.
If you have Supervisors who have been there their whole lives, are they keeping up with the times on their roles and responsibilities? Do you just take their word for why something is done or not done?

Common sense is necessary here. Reality is also needed. If you have lots of Supervisors and they are supervising each other, more than employees, there is a huge problem. If they are costing you more money than they are making for you, get rid of them. If they seem to always want things done their way, practical or not, it is time to take a hard look at your choices for these positions.
No matter what you want to imagine to yourself, your business is about, truth is, if you are going to survive this economic crisis, you better start realizing what you need to do. Evaluating who is actually making you money and who is draining the well, is a plan for survival.

5. AWOL Owners
For first time business owners or inexperienced owners, sometimes the glitter and gold give the false impression that they don't have to be directly involved for successful operation. They pop in a few times a week but are out enjoying the fruits of their investment.
Vacations, extravagant lifestyles and other costly perks keep them otherwise occupied. Nightly social events ensure that drinking is a good possibility. Are you living the good life at the expense of your employees? Are you traveling the globe, having a grand ole time? Do you come in with a hangover on a regular basis, letting the people who are there everyday witness the effects? Do they know and do they trust you? How are they affected by your behavior?

When you do come in, are your concepts of what is going on is based on the reports given or not given by the reigning management. Are you out of the loop on what is really going on in YOUR COMPANY? Do you make snap judgments, based on sketchy information. Do you leap before you learn?

This creates many scenarios that can prove fatal to a manufacturing business. Manufacturing should be a hands on business. Clear heads and good judgment are absolutely necessary in today's scary economy. Leaving the business to people who have no vested interest is crazy. Even the major corporations such as GM and others have seen the results of leaving unmonitored management to their own devices. This economy dictates more involvement by owners than ever before.

If you are a small business owner, you may want to reconsider your direct involvement. Do you really know what is going on in YOUR business? What don't you know? Why don't you know? Answer these three questions and you may find out quickly what you don't know.
1. Did you lose sales over the last year?
2. Did you have to layoff or cut wages in the last year?
3. Did you have to cut bonuses and/or health care benefits for employees?
Your company needs your direct attention if you are going to survive. Getting back to the basics, rolling your sleeves up and letting your loyal employees know you are in the mix with them.

6. Meetings, Meetings and More Meetings!
Does your company live at meetings? How many meetings per day does your company have? Do they have meetings everyday? Is there food provided at the meetings? Who attends meetings? What work is being left undone because of meetings? What is the outcome of the meetings? Are there beneficial changes or ideas coming out of the meetings?
Any business that prospers has to have some meetings. However, if your company is spending time everyday in meetings, something is seriously wrong. The leadership you have entrusted is incompetent. For your business to hold a meeting every single day, you should be making millions. You should have things running in top notch order. If you are not making millions, what are the meetings producing? Down time, social opportunities, non participant discord, what? For small businesses, one meeting per week should suffice. Also, cut out the food. Why are we eating? Have the meeting before or after lunch, not as an excuse for lunch, on the company.

7. Lack of Experience or Proper Training
What kind of employees do you have in your manufacturing business? Are they trained in manufacturing or did you get them through the local Temp service? Have they ever been in manufacturing before or were they babysitting or living down the street from you? Do you hire more inexperienced vs experienced people just so your wages are lower? Do you hire people who claim to have a degree but don't seem to have used it very much?

What saves you money or time on one end, may close the doors on the other. Granted, inexperienced people can hopefully be trained. However, if they tear up more, make more bad decision or cause discord among other employees because of lack of experience, are you going to recover from their errors? How many $10,000 mistakes can you afford? Most small businesses cannot continue to incur huge repair tickets. If someone costs you big money more than twice because of errors or bad judgment or lack of training, you are taking a big chance with your livelihood. When more experienced employees witness this time and again, their attitudes become difficult. They see where the money is going and don't understand the lack of concern from the people who should be concerned the most.

8. Nepotism and Fraternization
Nepotism and Fraternization can create as many problems, as waste and some of the other issues. General Motors is an excellent example of the situation with nepotism. If you have several relatives working for you or husband and wife or friends, you are creating an atmosphere of favoritism and are encouraging many different problems. If you have friends who work for you, they may be allowed to go unchecked on bad decisions or errors. You may be tempted to look the other way because they are your friends. Family members working in the same company create a situation for losing two employees vs one, in the case of firing, relocation, and other family related occurrences.
Fraternization in a company brings many of the same issues to the table. Not to mention work time loss due to spending time fostering the relationship. In all companies, people are suppose to be adults. However, that is not the truth. Decisions should be based on what is best for the company. Truth is, people are more likely to focus on the social vs the work related, even at your expense. It is not limited to the average employee. Supervisors and Managers account for a high percentage of fraternization cases.

9. Fair and Equal Treatment

How do you and your management team treat your employees? Is there unwarranted secrecy and pettiness? Do your employees feel like they are valued when they put forth the effort to do their absolute best for you? Are they disgruntled out loud and left to feel mistreated? Do they know that the sacrifices they are making in these economic times will be rewarded with loyalty and future benefits restored? Do you let the people who truly help put money in your pocket know how much you appreciate them or do you just see what they haven't done for you yet? Do you appreciate the experience that has proven itself and do you validate that by giving those people the opportunity to continue to grow your business?

10. Unprofessional Behavior
This can be as simple as coming to work in a bad mood or hungover or bringing problems from home to work. It can be an average low wage employee or the President of the Company.
Attitudes that foster unprofessional behavior allow for company policies to be ignored. Things such as the Plant Manager discussing other employees business with just about everybody. Nothing is a secret in a company with this problem.
If the Plant Managers or Top Supervisors are discussing employees and each others business across the company, how can anyone trust these so called "people in charge".
Supervisors, managers and others ignoring employees because of differences of opinion or problems with their work.
Secret emails circulating about work related activity that are totally uniformed and unwarranted.
Lack of knowledge or protocol by supervisors and managers about work related activities.
Decision making based on antiquated thinking or un-researched ideas. Money spent on training or upgrades that not only waste, but they are not productive to the goals of the company. They just sound good at the time.

These 10 things can cripple any business. Manufacturing is vulnerable to these even more because of the potential for a total shutdown. The Domino Effect results in a high possibility of inferior products going out the door.

If your manufacturing or any other business is failing, it is time to look beyond what you want to see and realize that desperate times require getting re involved in your business and cutting out the things that are not necessary and that are draining the bank account. In today's world, every employee should be participating to help keep the doors open. If you have a job, you should give 110%.

If you are an employer, you should be sure people want to continue to help you keep the doors open by being involved and making sure they have good working conditions.The ones who waste and don't give their best, need to know that things need to be different. Another valuable tool is appreciation of the regular employees. The ones who give their all and truly want to see you succeed. Let them know you appreciate them tremendously.

If it is your management that is costing you, or your administrative dept, maybe you need to go back to the basics. Do you really need 4 or 5 people up front for a business of less that 50 people? Eliminate waste throughout your business. Identify and monitor costs. Be involved. Be involved.....

Your livelihood depends on your return to common sense and good judgment. Success is a tedious journey in these economic rapids. Reality and True Desire are the oars that will steady the boat. Evaluate your business.