Nobody likes it when we are humming along, and things seem to be okay or routine, and we are focused on solving the daily operational challenges in our business when, out of the blue, something stops working. Maybe at the worst possible time.
Then we call in the experts to just fix it. Then we are told, the equipment is way outdated, and it is not worth fixing. Or the estimate to fix it is astronomical. And of course buying all new is even more astronomical.
Wait, why is this outdated? We just bought it brand new just a few years ago. It was the latest technology. It couldn’t have been more than 3 or 4 years ago. Let me dig up the receipt. Here it is. Then we look at the date. Whoa! It is more than eight years old. But the feeling remains: wait, it can’t be! It seemed like just a few years ago!
Why does this happen? Is it so bad? What’s the worst that can happen?
Sometimes we get so wrapped up in the daily hiccups and dramas that we find no time to look at the big picture, the overview level of where the business has been, and where we want it to go. Or maybe we have a bit of time for that, but we never get around to assessing the state of our capital equipment. Maybe we haven’t seriously looked at our long-term vision of what we want from our business since before we started. We took a big risk to get it started, so we should get something back. Right?
You may be thinking: “Yes, but…” Maybe it seems like we need a lot of available free money and time, to be able to take on such a big task. So we put it off until the mythical future “some day” when all that is available. And that day never seems to come. Years pass by, and we keep “trying.” Parkinson’s law states that a task will fill all the time available. Maybe we have allowed the daily distractions of business to consume 100% of the time and attention when giving even 2-3% to steering the ship can make a huge difference in the outcome.
The reality is, that when we are surprised by obsolescence of equipment, it is a surface level symptom of letting the business run on auto pilot, and not in a good way. Nobody is steering the ship as a captain. The owner/entrepreneur has self-demoted to a production role such as office manager, customer service representative, or field technician. Then nobody is steering the ship that is the company, towards some specific goal, such as increasing business valuation to allow the owner to retire comfortably. As could be expected, when nobody is at the helm steering it clear of dangers, we risk hitting rocky waters, and the ship could sink.
Am I overstating things? The failure rate of business is astronomically high. According to Inc. Magazine, 96 percent of all businesses fail within the first ten years. But that could never happen to you, right?
Next time you are surprised that some piece of equipment you bought “recently” is already obsolete, could it be a polite tap on your shoulder? Consider check to see if anyone is present and actively steering the ship that is your business towards a meaningful goal, and doing a good job. That might be a little bit important! If you find the captain’s quarters abandoned, consider taking control, and you may be surprised how quickly your business begins to soar.
Of course, you do not have to wait to be surprised. Consider asking experts to help you assess how current your equipment is, and how much time you have before you should replace the aging infrastructure. Once you are satisfied that you have a clear idea of the state of your capital equipment, write this information down, and organize it so you can visualize anticipated capital costs, years in advance. I think you will agree, it is so much easier to afford things when they are budgeted years in advance.
I do not have studies to cite, but it seems reasonable to assume entrepreneurs who develop the habit of doing this, will stand a much better chance of surviving into the 10th year, than those who take the “set it up and forget it” approach to capital equipment.