Identifying and Solving Tangible and Intangible Problems in Your Business

Running a business is never straightforward. Sometimes, you can clearly see what’s hurting your business, while other times, the underlying issues remain hidden. By breaking problems down into tangible and intangible categories, you can address both the visible and invisible factors that impact your company’s success. Let’s explore these two categories, identify common issues, and discuss actionable solutions.

Tangible Problems: What You Can See

Tangible problems are the obvious issues in your business that you can see and measure. These challenges directly impact your day-to-day operations and often have visible outcomes, like financial losses, inefficiencies, or dissatisfied employees and clients.

1. Poor Cash Flow

If your cash flow is consistently poor, it’s a clear signal that something is off. Maybe you’re paying vendors too quickly or collecting payments too slowly. Other possible causes include improper invoicing, poor milestone billing, or irregular billing cycles. Analyzing these factors and adjusting payment terms or improving invoicing systems can stabilize your cash flow.

2. Unhappy Staff

You can usually tell when your employees are unhappy. While this is a visible issue, it’s often the result of deeper, intangible problems. Poor treatment, lack of communication, or mismanagement can lead to staff dissatisfaction, which in turn affects productivity and morale.

3. Insufficient Work

A shortage of work leads to downtime and financial strain. This tangible issue could stem from ineffective sales processes or poor client management, which we’ll explore later in the intangibles section.

4. Bad Estimates

Inaccurate estimates can cause serious problems. Underestimating project costs or timelines can result in loss of profit and unhappy clients. Ensuring accurate estimates through better data, communication, and tools is essential for maintaining profitability.

5. Job Site Errors

Mistakes on the job, like incorrect elevations, poor drainage, or materials placed in the wrong spots, are easy to see. These errors not only waste time and resources but also damage your company’s reputation. Proper training and project management can help minimize these errors.

6. Unhappy Clients

How you treat clients plays a significant role in your business’s success. If clients are frequently chasing you for updates, instead of you being proactive, it reflects poorly on your service. Better communication, faster responses, and customer-focused strategies are key to keeping clients happy.

7. Lack of Order

Disorganized systems, whether in communication or file management, lead to inefficiency. If you can’t find crucial documents or misplace important information, it’s a sign that your organization and operational processes need improvement.

8. Poor Assets

Dilapidated trucks, outdated equipment, and run-down infrastructure send a bad message to both employees and clients. Investing in maintaining or upgrading assets is necessary for long-term success and efficiency.

9. Low Pay for Employees

Underpaying staff can eventually bite you. Losing top talent due to inadequate compensation is a significant threat to your business. Competitive salaries and benefits are essential to retaining skilled workers and maintaining productivity.

10. Low Profits

Low profits are easily seen on a profit-and-loss statement, but the root causes often hide beneath the surface. Identifying areas where costs can be reduced or revenues increased is critical.

11. Workplace Injuries

Workplace injuries are a tangible, measurable issue that can severely harm your business. They reduce productivity, lead to potential lawsuits, and create unsafe environments. Regular safety training and incident tracking can prevent many of these problems.

12. Talent and Capital Shortages

Without enough skilled workers or financial resources, your business will struggle to operate effectively. Addressing talent gaps and securing proper capital investment should be a priority.

13. Scheduling Mistakes

Mistakes in scheduling lead to project delays, unhappy clients, and strained resources. Improving project management systems and ensuring clearer communication can help resolve this issue.

Intangible Problems: The Hidden Threats

While tangible problems are easy to identify, intangible issues are often the underlying causes that go unnoticed until they lead to visible damage. These are the unseen forces that affect company culture, leadership, and decision-making.

1. Succession Issues

When leadership transitions between generations are not handled well, it can create instability. The older generation may be reluctant to hand over control, or the new leadership might not be fully prepared. Ensuring smooth, well-planned succession is crucial for long-term success.

2. Rapid Growth

Growing too quickly can lead to chaos if your administrative functions can’t keep pace with sales. While growth is generally seen as a positive, if it’s not managed carefully, it can strain resources and cause operational inefficiencies. It’s often better to focus on improving internal processes before expanding.

3. Poor Culture

A toxic work environment where employees are disengaged and unmotivated is a serious intangible issue. Poor company culture affects productivity, innovation, and employee retention. Leaders should prioritize building a positive, supportive work culture to keep morale high.

4. Inefficiency

If jobs aren’t getting done on time or operations are sluggish, inefficiency may be the root cause. Poor time management or bad work habits can be hard to detect, but they are detrimental to productivity. Encouraging better work processes can improve overall efficiency.

5. Poor Leadership

Leadership failures often manifest in indecision, mixed messages, and inconsistent management. Poor leadership can quickly trickle down to affect every level of your business. Training, coaching, and clearer decision-making processes are essential for strong leadership.

6. Lack of Business Education

A common but overlooked issue is the lack of proper business education. Many business owners do not invest in the training they need, leading to poor decision-making and stagnation. Investing in ongoing education and mentorship can dramatically improve business performance.

7. Weak Marketing

Without strong marketing, potential clients won’t know about your business. Often, companies neglect marketing when things are going well or over-market when they can’t handle the demand. Finding the right balance and having a solid marketing strategy is key to long-term growth.

8. Poor Sales Processes

If you’re not screening clients properly, you’ll end up taking on work that isn’t profitable or aligned with your business goals. Fine-tuning your sales processes to ensure you’re saying “yes” to the right projects can improve efficiency and morale.

9. Unclear Financials

Without a clear understanding of your financials, it’s impossible to know where your business stands. Reviewing income statements, identifying profit drivers, and analyzing key financial ratios should be part of your regular business review process.

10. Power Struggles

When business partners or leaders have conflicting visions or skill sets, it leads to inefficiencies and confusion. Employees may even take advantage of the discord. Resolving power struggles through clear communication and role definition is essential.

11. Personality Differences

Every leader and team member has a different personality, and these differences can sometimes lead to conflict. Whether it’s an aggressive leadership style or a more laid-back approach, aligning personalities and managing conflict is key to building a cohesive team.

12. Lack of Experience

Experience gaps within your team can be a blind spot for your business. Mentorship and advice from industry experts can help fill these gaps and lead to better decision-making.

Turning Intangibles into Tangible Solutions

Many of the intangibles listed above lead to tangible problems like low profits, unhappy clients, and inefficient operations. The key to resolving these issues is identifying the underlying cause and turning it into a tangible, actionable solution. For example, poor leadership can be addressed through leadership coaching, and a weak marketing strategy can be improved by hiring marketing professionals.

At KTC, we specialize in helping businesses identify both the visible and hidden issues that are holding them back. By focusing on the root cause of your problems—whether it’s leadership, marketing, or financial management—we create tailored solutions to help your business thrive.

Conclusion: Solve the Root Cause to Improve Business Performance

Tangible problems are easy to spot, but solving them without addressing the underlying intangible issues often leads to recurring challenges. By understanding both types of problems and addressing them with the right strategies, you can set your business on a path to sustained success.