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Are your business’s cash flows constantly on a roller coaster ride? It might be because you suffer from what I call “business multiple personality disorder.” This phenomenon, observed over nearly 20 years of working with thousands of business owners, describes a trend where entrepreneurs constantly change their business strategies, often influenced by the latest book, podcast, or mastermind they encounter, risking creating instability and financial volatility in their operations. The pressure to innovate and adapt can lead to a dangerous cycle of constantly changing strategies. While staying current and flexible is crucial, frequently shifting business approaches can wreak havoc on stability and long-term success.
In this article, we delve into the concept of business multiple personality disorder, exploring its causes and effects on cash flow and overall business health. You’ll learn how business owners can identify and avoid the pitfalls of this disorder, and the importance of aligning with industry rhythms, evaluating business decisions carefully, and recognizing personal rhythms to achieve business stability.
What is Business Multiple Personality Disorder?
Business multiple personality disorder occurs when business owners constantly change their approach based on the latest book they read, podcast they listened to, or mastermind they attended. This constant shifting prevents a business from finding a stable footing. It would be like playing basketball and changing your shooting form every other game. You keep changing your approach, and then you can’t really measure what works and what doesn’t.
Adopting the principles and demeanor of various business gurus—like Gary Vee, Dave Ramsey, or Elon Musk—can create a fragile approach to business. This imitation game leads to a lack of authenticity and consistent strategy, which are crucial for long-term success. You're playing somebody else's game. You're not leaning into your authentic self.
Understanding Business Rhythms
To break free from this cycle, it’s essential to understand the three rhythms of business:
1. Industry Rhythms
Every industry has its own rhythm, dictated by external factors such as tax deadlines for CPAs or seasonal trends for gyms. Don’t fight against those industry rhythms. Instead, align your business activities with these natural cycles. For instance, gyms should capitalize on the New Year’s resolution rush in January rather than ramp up marketing during slower months.
2. Business Decision Rhythms
These rhythms are based on specific decisions made within your business. Choices about payment methods, marketing strategies, and operational processes can introduce volatility. It’s crucial to analyze these decisions’ impact on your financial performance and be cautious of changes that might create new problems. We need to be very cognizant of the secondary and tertiary ramifications of making a change.
3. Personal Rhythms
Personal energy levels and mindset fluctuations throughout the year can affect business decisions. Recognizing these personal rhythms helps avoid making drastic changes during low-energy periods.
The Importance of Consistency
Business consultant Jim Collins, in his book Good to Great, emphasizes the importance of a consistent strategy. He argues that businesses that stick to their core values and strategies over time tend to outperform those that frequently change direction. This view is supported by research from the Harvard Business Review, which found that companies with stable leadership and consistent strategies are more likely to achieve long-term success.
For business owners looking to avoid the pitfalls of constantly changing strategies, here are some actionable steps:
Align with Industry Rhythms
Understand the natural cycles of your industry and plan your activities accordingly. Avoid ramping up efforts during low periods and instead focus on peak times for marketing and expansion.
Evaluate Business Decisions Carefully
Analyze the impact of major business decisions on your financial stability. Be mindful of changes that could introduce new challenges or exacerbate existing issues.
Recognize Personal Rhythms
Be aware of your personal energy levels and how they affect your decision-making. To prevent instability, avoid making significant changes during low-energy periods.
Conclusion
Constantly changing business strategies can lead to instability and financial volatility. By understanding and respecting industry, business decisions, and personal rhythms, business owners can create a more stable and successful operation. It’s crucial to find a consistent approach that aligns with your authentic self and the natural cycles of your industry.
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