Luna Park Or Looney Park? Which Is Your Small Business Environment?

INTRODUCTION:

The thrills and spills of business can be likened to a Luna Park ride. One minute you're up and then you're down. Just when you think everything is finally sorted something else happens that puts a cat amongst the pigeons. Owning a business can be like life and let's face it if everything was so easy, how do we learn to react to a situation when something goes wrong if we have never had to face adversity?

As small business accountants Sydney & Dubbo we face challenges like everybody else. As it's Friday, for a bit of fun, which ride at Luna Park would reflect your business?

Figure 1: Which ride best represents your small business?

1. Big Dipper

The Big Dipper was a wooden roller coaster built in 1935 and operated until 1979 when it was partly burnt by the fire and had to be demolished.

Despite its high and lows (ahem), it was not able to mute the noise created (primarily from its patrons) as residents complained when it was rebuilt in steel and put back into operation.

Is your business erratic where it's killing it one minute but struggling the next? How can you smooth out the ride through:

• selling more (or alternatives) during quiet times;
• less customer or supplier reliance;
• even out cash flow (through better terms or scheduled loan repayments);
• diversification?

Remember that an erratic business will tend to make potential purchasers nervous leading to business valuers to more than likely discount the price of the small business valuation.

Figure 2: Sadly the Big Dipper had its day but did not adapt to a changing environment causing it to leave (perhaps a capsule ride might have worked?)

2. Moon Ranger

This ride starts of slowly before exploding into the stratosphere. This is a thoughtful business that has a very focused outcome that will be disciplined to get to where it needs to go and then reach for the stars and the moon.

This type of business will have:

• done its research before commencing;
• performed a very solid business plan with what-if scenarios through three way budgets;
• have an exit plan with a view to selling.

3. Dodgem City

This is where people get into the dodgem cars and the idea is to avoid being hit by other cars in absolute mayhem.

A business of this type has:

• no direction or leadership;
• few systems in place;
• a full time 'fire department' for unhappy clients or team members.

Figure 3: Is your business dodging bullets the whole time?

4. Wild Mouse

It squeaks, it rattles, it roars! It's a ride that makes you here for a fast time and not a long time.

This is a business that:

• has short time frame to get in and make its money and then get out;
• knows exactly when to pounce and when to leave;
• has researched whether it's a fad and its days are numbered due to technology etc.

5. The Rotor

This ride spins around very quickly keeping you suspended in mid air until it slows down and then causes you to drop through the floor.

This is a business that can not keep going without momentum. It will be a business that:

• relies too heavily on its owners or key employees;
• performs big contracts without ensuring security of payment;
• fails to market consistently waiting for times to be slow before advertising.

CONCLUSION:

Small business can be up and down but naturally it is less stressful if you can have more thrills than spills.

Which ride represents yours?

It might be time to hop off one and try another and get yourself on the right track.