My business teacher once told me that a common mistake people make in their pursuit of success is focusing so much on gains and ignoring losses.
He used an analogy of what he called the leaky bucket syndrome to illustrate the point.
It is like a trying to fill a tank of water with a bucket which has numerous holes at the bottom.
You fetch water from the source and by the time you reach your collection tank, it is almost empty. You go back to fetch more and come faster this time only to get more or less the same result.
Alternatively look at it this way: your income is the water; your bucket is the bank account and the tank is your needs or profit.
Very often we work very hard trying to look for money but what reaches the bank is very little; hardly enough to meet our needs or drive our business to profit zone due to numerous leaks.
So what is the solution?
Well, the answer must revolve around trying to plug the holes in order to get a sustainable solution.
Most of the time when we realise very little money is reaching the bank, we work hard in order to get more. We increase revenue streams, product range, number of employee or step up marketing. But we hardly see any notable improvement if holes are still gaping.
A better way would be to first all of seal all the holes. We ensure all the money we get helps to better our lives or our companies.
In your desire to get more don’t lose sight of quality and efficiency. You may be surprised to find out that to grow your business and meet your profit target this year you don’t need more employees, more products or even more regions.
You can tremendously improve your life by using the resources you have efficiently rather than wait until when you get more.
Equally, to turn around your business focus more on the things you must stop doing immediately and your customers will be happier with improved service and your bank balance will start to fatten.
As you strive to look for more customers, have more products and expand your market to ensure you are consolidating and taking care of all your gains. Do not fail to take care of your customers in your haste to get more.
If you realise your income, no matter how much you work hard to increase it, is not able to meet your basic needs, you need to shift your focus and work on leakages.
Remember if a vessel is leaking, it can only be filled temporarily. In financial terms ‘it will never be financially stable.’
Characteristic of firms with the leaky bucket syndrome is that they are always hiring, looking for customers without minding those running away, borrowing money and fighting various crises. They are never stable.