Denial About Financials Leads to Failure
The husband-and-wife team behind a struggling ice cream manufacturer enjoy the perks of being owners but won’t apply that enthusiasm to managing their finances.
A private-label ice cream manufacturer on the Texas Riviera—Lucky Licks—had a solid few years of sales, but its profits are rapidly melting away. The $5 million business is no Ben & Jerry’s, and the owners, a married couple named Jack and Jessie, are cash broke.
When the couple started the business more than 10 years ago it was their dream to sell a homemade product they loved and believed in. That enthusiastic approach is a good start for any company, but it has nothing to do with whether a business fails or succeeds. That’s a mistake thousands of business owners make: They think having a passion or a dream is the only recipe for success. But they’re missing key ingredients, like financial controls and a disciplined plan for profit.
Because Lucky Licks’ product is good, sales are good. The husband-and-wife team are meticulous when it comes to quality control. They take pride in what they do every step of the way, from using the finest ingredients to making sure the product is fresh. Although their top-line sales are in the millions, they are still losing money. Why? Because they didn’t want to face the day-to-day financial realities that go into making a profit.
Complete article on businessweek.com
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