Part 4: What is happening in companies where new business initiatives aren't moving forward? — Signs that a successor should bring in an external sounding board

"I know we have to do new business. But for some reason, it just won't move forward."

This is a common concern I hear from successors after a transition or from executives in a second-startup phase.

・There are ideas
・The necessity is understood
・It has been discussed within the company several times
・But it always gets pushed to the back burner
・In the end, we go back to dealing with existing business

In this way, new business remains stuck as something that "should be done."

At first, it doesn't even look like a problem.

The existing business is running. There is revenue. Daily operations are busy.

Therefore, it looks like there is no need to rush into new business.

However, if that state continues, the company gradually loses its future options.

Common Misconceptions

When new business doesn't progress, many executives think like this:

"Employees lack a sense of crisis"
"Executives aren't proactive"
"The ideas are weak"
"We need better plans"
"It should move forward if we just assign someone in charge"

Of course, there are aspects of that.

However, looking at the actual situation, the problem is often not just a simple lack of ideas.

The essence is,

that the new business is not connected to the cash structure of the existing business

.

In other words,

・What is the purpose of doing it?
・Which gross profit will be the source of funds?
・How much can we invest?
・When will we withdraw?
・What kind of burden will it place on the existing business?

These points are not organized.

That is why, even though it is talked about, it does not move forward.

What is actually happening on the ground

This situation is particularly prone to occurring in companies after a leadership succession.

The successor feels the need to do something new.

・Existing customers are aging
・Unit prices are not rising
・Gross margins are thinning
・Recruiting talent is difficult
・Old winning patterns are less effective
・Anxious about the state of the company in 3 to 5 years if things continue as they are

Therefore, they attempt to take on new business or a second founding.

However, this is what happens within the company:

“We are already at capacity with our current work.”
“Who is going to do it?”
“Will it generate revenue?”
“What about our existing customers?”
“Is that really necessary?”

In this way, the conversation comes to a halt.

From the successor's perspective, the company seems resistant to change.
From the executives' perspective, it looks like the president is just starting to talk about new things again.

This creates a gap in temperature.

The real reason new business initiatives stall

The reason new business initiatives stall is not just a matter of motivation.

In many cases, the following three things have not been organized.

The first is investment capacity.

New business always requires time and money.

Allocating personnel.
Creating prototypes.
Sales activities.
Running advertisements.
Using external talent.
Reducing time spent on existing business.

In other words, before new business is an “activity to increase sales,” it is first an “activity that uses cash.”

If you start without looking at this, it will become difficult along the way.

The second is the relationship with existing business.

New business will not succeed if you think of it as separate from existing business.

Will you leverage customers from existing businesses?
Will you expand existing strengths horizontally?
Can you run it with existing personnel?
Can you use the gross profit from existing businesses as a source of funding?
Will it damage the brand of existing businesses?

If this is not organized, the new business will become something 'separate'.

As a result, it looks like extra work from the perspective of the company.
From the perspective of the existing business site, it looks like a burden on them.

The third point is exit criteria.

The most dangerous thing in a new business is not failing to start.

It is not being able to decide when to stop after you have started.

・How long will you test it?
・How much will you spend?
・How many customer responses will you observe?
・What figures will lead you to continue?
・What figures will lead you to withdraw?

Without this, decisions become emotional.

'I've done this much, so just a little more.'
'It's hard to stop because the person in charge is working hard.'
'It's hard to stop because the president started it.'

In this way, you lose cash.

'Good ideas' are not enough

A common mistake in new business is judging solely by whether the idea is good or bad.

Of course, ideas are important.

However, in new businesses for small and medium-sized enterprises, there is something more important than that.

That is,

whether you can test it within a range that won't kill the company

.

Unlike large corporations, it is difficult to tolerate losses for years and invest heavily.

That is precisely why you must:

・Test on a small scale
・Make the gross profit visible
・Use existing strengths
・Not increase fixed costs too much
・Decide on exit criteria in advance
・Not destroy the cash flow of existing businesses

This order is important.

New business initiatives do not move forward just by talking about dreams.
On the other hand, looking only at the numbers will not make them move either.

What is needed is the connection between passion and cash.

Internal opposition is not necessarily a bad thing

When you try to move forward with a new business, opposition may arise from within the company.

“Isn't your current work the priority?”
“We don't have the capacity for that.”
“Will it really sell?”
“Won't it just stop halfway again?”

From the perspective of a business owner, this might look like resistance.

However, opposition often contains important realities.

The front line sees the daily workload.
Executives see the impact on existing customers.
Accounting sees the cash flow.
Sales sees the customer reaction.

In other words, opposition is not just being negative; it is also risk information.

The problem is not that opposition arises.

The problem is failing to organize that opposition and letting it turn into emotional conflict.

A state where new business initiatives are not moving forward is a red light for management

A state where new business initiatives are not moving forward is not just a stagnation of planning.

It is a sign of structural issues in management.

・The gross profit structure of existing businesses is not visible
・Investment capacity is unknown
・The president's sense of crisis is not shared within the company
・Executives have not made the new business their own
・There are no exit criteria
・Existing businesses and new businesses are disconnected

In this state, even if you start something new, it will not last.

And in companies where new business initiatives stop, it is often the case that the issues with existing businesses are also not visible.

This is because new business initiatives can only proceed using the surplus capacity of existing businesses.

Gross profit is not remaining.
There is a shortage of personnel.
Only the president can make decisions.
Numbers are not shared with executives.
Priorities are not decided in meetings.

If you start a new business while in this state, both your existing business and the new business will end up half-baked.

Things to organize first

You do not need to create a perfect business plan from the start to move a new business forward.

To begin with, just organizing the following five points will make a difference.

The first is why you are doing it now.

Do you want to increase sales? Do you want to improve gross profit? Do you want to change your customer base? Do you want to connect it to recruitment? Do you want to prepare for the decline of your existing business?

If the purpose is vague, the company cannot take action.

The second is which strengths of your existing business you will use.

Is it your customer base? Technology? On-site responsiveness? Relationships with the local community? Industry knowledge? Trust?

A new business that is not connected to your strengths has a lower probability of success.

The third is how much you can invest.

How much can you spend per month? Whose time will you use? How many months will you test it? How much burden will it place on your existing business?

If you start without deciding these things, it will become difficult along the way.

The fourth is what you will look at to decide whether to continue.

Is it sales? Gross profit? Number of inquiries? Repeat rate? Customer reactions? The quality of sales leads?

If you only look at sales at the initial stage, you will make the wrong judgment.

The fifth is deciding on exit criteria in advance.

By when must you see results, or else you will stop? What amount of money is acceptable? Under what conditions will you pivot?

Exit criteria are not about assuming failure.

They are a safety device to keep the company from dying.

In conclusion

"New business initiatives aren't moving forward"

That is not necessarily due to a lack of ideas.
It is not necessarily due to a lack of urgency among employees.
It is not necessarily because internal opposition is bad.

In many cases,

the cash structure of the existing business and the investment decisions for the new business are simply not connected.

That is all.

New business initiatives cannot be sustained by momentum alone.
On the other hand, they will never start if you are too cautious.

What is important is:

Confirm your strengths.
Look at pricing and gross margins.
Understand your investment capacity.
Test on a small scale.
Set exit criteria.
Decide whether to continue, change, or stop.

This is the order.

A successor's new business is not a rejection of the predecessor.
It is an update to ensure the company survives.

However, that update requires structure, not emotion.

It starts with organizing the sense of urgency, vision, investment capacity, and risks in the president's own mind.

Information on 60-minute sounding board sessions

If you are currently:

・Having ideas for a new business but they aren't moving forward
・Stalled due to internal opposition or a difference in enthusiasm
・Too busy with the existing business and always putting it on the back burner
・Unable to decide on the amount or duration of investment
・Afraid to start because there are no exit criteria

If you are in such a state, one option is to try organizing your thoughts with an external party.

In a 60-minute sounding board session, we will:

・Identify the real reason why the new business is stalled
・Determine which strengths of the existing business can be utilized
・Determine how much you can invest
・Determine what to look at to make continuation decisions
・Determine the first step to test on a small scale

and organize these points.

“A state where new business initiatives can move forward without dying”

I help create this state.

*This article has been reconstructed based on multiple support experiences.
It is unrelated to any actual companies or individuals.

📩 A “simple check” for when you are hesitant about a decision

Are you currently experiencing any of the following?

□ Even though you decided, some sense of discomfort remains
□ You have a desire to revise, but cannot put into words what is holding you back
□ You cannot consult with those around you and keep thinking about it alone
□ Your thinking is stuck on “whether to go back or keep moving forward”
□ The same hesitation is repeated every time you make a decision

If two or more apply to you,
it may not be a problem of ability or experience,
but rather a state where the premises for your decisions are not organized.

I do not
“teach the correct answer,”
but rather provide support to create a state where business owners can make their own decisions.

In a 60-minute sounding board session,

・The premises you are currently operating on
・The options that truly remain
・Risks you are not seeing
・The next realistic step you can take

we will work together to put these into words and organize them.

Whether or not to re-decide
is something you can think about after organizing your thoughts.

First, why not try getting what is in your head out into the open?

👉 Contact us here
https://jissenstrategy.com/contact
✉ info@jissenstrategy.com

Atsushi Kumagai
Practical Management Advisor / SME Management Consultant

Handles over 400 management consultations annually.
Focusing on successors, founders, and second-generation business owners within 3 years of succession,
I provide hands-on support to create a state where they can “think, decide, and act” in the field.

Next article

Previous article