Business Education

The Valuable Business Lessons of 1873, 1893, Mars Music, and Tomorrow

Back in the late nineteenth century, America experienced an incredible economic boom. With the Civil War long over and people moving west, the country enjoyed a boom cycle that lasted nearly a decade. Ironically, this good fortune would sour and become the direct cause of a national crisis.

Throughout history, the business world has been marked by cycles of boom and bust, often fueled by ambition and the allure of rapid growth. The economic panics of 1873 and 1893, along with the rise and fall of companies like Mars Music over a century later, offer valuable lessons for entrepreneurs and businesses today.

Although separated by decades, these historical events share a common thread: the dangers of hasty, unchecked overexpansion. So, let’s take a long look at these pivotal moments, exploring how aggressive growth without a solid foundation can lead to catastrophic outcomes and what modern businesses can learn to avoid similar pitfalls in the future.

The Commonality Between the Panics of 1873 and 1893 and the Collapse of Mars Music

While the Panic of 1873, the Panic of 1893, and the collapse of retailer Mars Music occurred in vastly different historical contexts and economic climates, they share a fundamental commonality: hurried overexpansion and excessive debt.

Both panics were triggered by overindulgent speculation and unsustainable debt levels in various sectors of the economy. In 1873, it was primarily in railroads and manufacturing, while in 1893, it was in railroads, silver mining, and other industries.

Approximately 109 years later, while not on the same scale as the panics, Mars Music’s collapse was also driven by overexpansion and excessive debt. The retailer opened new stores at too rapid a pace, leading to high operating costs and a strain on its financial resources.

Regardless of the specific causes, the consequences of these events were remarkably similar because they all share a common thread: the negative impact of financial instability and economic downturns. These crises highlight the importance of prudent financial management, risk assessment, and adaptability in the face of changing economic conditions.

Slow and Steady Wins the Race: How Businesses Can Grow Sustainably Without Over-Expanding

The rush to grow can feel like a race. Every entrepreneur wants to expand, bring in more profits, and become a household name. But, just like in any race, sprinting too fast can lead to serious missteps. So, how can businesses avoid over-expansion and ensure they grow at a healthy, sustainable rate? Well, there are some things you can do to avoid making such mistakes:

Understanding the dangers of over-expansion. Let’s begin with a simple exercise. Imagine trying to walk on a tightrope while juggling. It’s tough, right? That’s what over-expansion feels like. Businesses that push too hard to grow often spread themselves too thin, losing focus on what made them successful in the first place. This can lead to lower-quality products, unhappy customers, and ultimately, shrinking profits.
Set clear and achievable goals. Goal-setting is comparable to having a roadmap for your journey. Without clear directions, you might find yourself going in circles or heading off a cliff. By setting specific, measurable, and realistic goals, businesses can focus on growth steps that truly make sense. For instance, instead of thinking about opening ten stores at once, aim for one or two first. Get those right, and expand from there.
Know your market inside and out. Think of your market as an ocean. If you don’t understand the tides, you’re likely to capsize your boat. Businesses need to research their target audience, understand their needs, and know the competition. This knowledge helps in making smart decisions, such as when and where to expand. By keeping a close eye on market conditions, businesses can spot opportunities without taking unnecessary risks.
Focus on quality over quantity. In the race to grow, it’s easy to get excited about numbers. But remember, a small number of happy customers is far better than a big number of unhappy ones. Businesses can build a loyal customer base by focusing on creating high-quality products or services. Satisfied customers tend to return and spread the word, leading to organic growth that doesn’t come with the pitfalls of over-expansion.
Keep a close eye on finances. Just as a gardener checks the soil before planting seeds, business owners should keep track of their financial health. Understanding cash flow, expenses, and profit margins can prevent a business from becoming overgrown and unmanageable. By monitoring finances regularly, companies can decide when it’s the right time to invest in growth and when it’s best to hold back.
Invest in employee development. Think of employees as the roots of a mighty tree. Without strong roots, the tree can’t grow tall and wide. Investing in training and development keeps employees engaged and productive. Happy, skilled employees lead to better customer service and improved products, strengthening the business from the inside out. When the foundation is solid, the possibility for expansion becomes much easier to handle.
Embrace innovation gradually. Innovation is akin to adding spice to a dish: too much can ruin the flavor. Businesses should embrace new ideas, but it’s essential to do this gradually. For instance, before launching an entirely new product line, consider introducing an improved version of an existing one. This allows businesses to gauge customer reaction and make adjustments without risking it all on a big gamble.

Last but not least, continually cultivate customer relationships by building strong relationships with customers. It’s all about nurturing connections that promote loyalty. Engaging with customers through feedback loops, surveys, and social media can provide insights into what they love and what needs improvement. This dialogue can guide businesses to grow wisely, responding to customer needs rather than assuming what they want.

The Path to Sustainable Growth

In the end, sustainable growth is all about balance. Just as a well-fed plant needs regular care, businesses thrive with careful attention and planning. By setting achievable goals, knowing the market, focusing on quality, keeping finances in check, investing in employees, innovating wisely, and nurturing customer relationships, businesses can expand without losing their footing. So, take a deep breath, pace yourself, and watch your business flourish.

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Stop Enforcing These Dumb Office Rules That Make People Quit

September 6, 2017 No Comments

If you want success, you’ve got to stop doing certain things. And, these include enforcing dumb office rules. Let’s face it, there are a number of do’s and don’ts in the workplace we all seem to recognize as unnecessary. But, for some strange reason, we follow tradition — even when it’s doesn’t really make sense. Giving into the “ways it’s always been notion” simply hinders us in different ways. Okay, rules are fundamental in business but too many rules stifles your employees. 5 Most Hated Office Rules that Drive Employees Crazy Think about it this way — more freedom means more business. Put another way, the more rules applied, the less freedom your team members enjoy. That’s simply creates artificial barriers they must overcome. Which means, it’s a waste of time (and ultimately money) and that’s not going to propel your business forward. When there are less rules, there’s more enthusiasm. Fewer rules also means more creativity. Companies need to have rules—that’s a given—but they don’t have to be shortsighted and lazy attempts at creating order. When companies create ridiculous and demoralizing rules to halt the outlandish behavior of a few individuals, it’s a management problem. There’s no sense in alienating your entire workforce because you don’t know how to manage performance. It makes a bad situation that much worse. —Entrepreneur Now, there are reasonable rules. It might apply to workplace social media use. Or, about limiting overtime. But, there are probably at least a few rules that your employees hate. These cause unnecessary stress and can easily become too overwhelming. If rules are stringent enough, you might lose good talent. Obviously, you need to retain the best talent and attract more. But some rules will make that quite problematic to achieve. Here are five of the most hated office rules that drive employees crazy: Time off rules. We all get sick, tired, and have personal needs. So, if an employee doesn’t feel well, don’t make it a bigger burden by requiring a doctor’s note. And, be flexible. If an employee feels lying is the best way to take a personal day off, there’s something wrong. Treat your employees with respect and you’ll definitely reap the rewards. Approval rules. Try this thought experiment — every time you make a purchase decision or other kind of decision in your personal life, stop to consider how productive it would be to seek an approval. Now, there are reasonable limits but you should trust employees to do what’s in the best interest of the company. Performance rules. Performance evaluations aren’t necessarily the best use of time. In fact, there are plenty of good arguments they just drive people nuts. What’s more, these are often dreaded, boring routines. So, ask yourself if you really need performance rules to meet performance guidelines to reward someone during a performance evaluation. Internet use rules. Unless you’re dealing with super-secret information, there’s really little to no need for internet rules. Your team already knows what is and what isn’t acceptable. Give them the power to do the right thing and they’ll feel respected. On-site attendance rules. The office isn’t always the best place to get things done. Sometimes, working from home or outside the office is better. Requiring people to be in the office or on-site from this time until that time daily simply won’t produce the best results. What hated office rules have you eliminated? Which office rules do you find the most productive? Please share your thoughts and experiences by leaving a comment! Interested in learning more about business? Then just visit Waters Business Consulting Group. [shareaholic app=”follow_buttons” id=”26833294″]

Is Your Business Really Ready to Expand in the Coming New Year

January 7, 2020 No Comments

Is your business really ready to expand in the coming new year? Although the question seems complicated, it’s not too difficult to answer. Just four key factors can quickly help you determine if you’re ready to expand your business. And, perhaps more importantly, if your company is ready to expand. What it Really Means to Expand a Business Business owners often think about two elements when it comes to expansion — output and sales. Of course, it’s not that simple. However, these are two very important parts of the overall equation. Nonetheless, what it really means to expand a business is to take on a whole new level of responsibility. Even thinking about growing your business is exciting. Expansion means more products or services, customers, sales, and income for you. And, for businesses with physical locations, expansion might mean opening a bigger or second location. Before you rush into expanding your small business, you need to make sure your company is actually ready for growth. Your recent business success isn’t the only thing you should look at. —Forbes.com It also means the business having to respond to a new level of production while not losing it’s nimbleness or its personalized customer service. After all, if it can’t do the latter two — stay agile and maintain customer care quality — it will hurt the company greatly. 4 Signs It’s Time to Expand Your Business So, just what are the signs that it’s time to expand a business? Well, it comes down to only a select group of factors, which include the following: You have too much business. Time and again, you’re falling behind because you simply lack the resources to get all the work done. You’ve streamlined every single solitary step along the way and still, you’re not able to adequately keep up. Worse yet, it’s starting to show itself to customers. Too much work and too few resources to get it done in a timely manner. You have a strong team in-place. Your team members are your secret sauce. Without them, you’d really be in big trouble. Fortunately, they’re able to pull off magnificent feats over and over again. Well, that’s not only good news for the present, but really good for a future expansion. You have the money to expand. Expanding usually means incurring significant expenses. But, if you have some retained earnings saved and a strong forecast for the next several months, you probably can afford to expand your operation. You have a plan to upscale your operation. While the first three elements are absolutely critical, this is perhaps the most important of all because it will define your way forward. (It’s also where winging it just won’t cut it.) So, take the time to consult an experienced business consultant and coach. Someone who has helped companies grow before. Work together to formulate an actionable expansion plan. What other advice would you give business owners who want to know if it’s time to expand? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

How to Turn Your Idea into a Business

January 3, 2018 No Comments

It’s easy to turn your skills into a business. That’s one thing. You already have methodologies and experience. But, what if you just have an idea? Something you can’t seem to shake? It’s there day-in and day-out. You simply can’t get it out of your head. But, you’re afraid to tell anyone because you’re not sure it has merit. Or, it’s a take on something else that’s a proven model. Whatever the case, you’re eager to turn your idea into a business. How to Know when It’s Time to Start a Business The biggest barrier people have to starting-up a business isn’t money. It’s not a lack of motivation. The largest barriers are self-imposed. It’s over thinking things. In other words, a kind of paralysis by analysis. People come up with all sorts of reasons they can’t start a business. Funds. Time. Competition. Take your pick because there’s no lack of excuses. Which ultimately, that’s what these so-called reasons really are in practice. Ideas are just ideas. An idea is the seed of a successful product or service. Without proper care and maintenance, it will not bloom. Ideas require solid research of the target market, a good strategy and a sound business plan, without which, ideas cannot go much further. If you want to start a business and make a go of it, you need more than just an idea. —Entrepreneur.com We’ve all heard the success stories about entrepreneurs who didn’t give up. Take Walt Disney for example. Turned down by lender after lender, he never gave up. So many years later, we all see his crazy idea as a terrific business. Now, those theme parks are the best of the best. But, it all started with an idea — nothing more. How to Turn Your Idea into a Business Of course, you might not think your idea is necessarily business worthy. However, you don’t know until you give it a genuine try. Although it’s intimidating, there’s a big reward just waiting if you put in the effort. Here’s a few suggestions for how you can turn your idea into a business: Ask friends and family for feedback. Don’t let fear stand in your way. Your idea needs feedback. If you speak with a few people about it, you’ll learn something interesting. This is a great way to flesh it out. And, it might even give you more ideas that contribute in a wonderful way. Try to find working versions of it. If your idea isn’t out there as a reality yet, chances are excellent there’s something like it. Look for similar businesses and see how they operate. Even if it’s a new take on a common business model, you’ll learn through some simple research. Start by giving it away for free. Next, put it into action. Set aside some time to give it away for nothing (or a very cheap price). When you put it into practice, you’ll see where it naturally takes you. And, you’ll also learn if it can actually be monetized. Be ready to rework it along the way. Of course, you’ll need to give yourself permission to make mistakes. Use them to your advantage to better the service or product. As you do it over and over again, you’ll refine the process. What other suggestions do you have to turn an idea into a business? Where did you start your company? How can someone set up for success with just an idea? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.