Business Failure – Not an Option!
Business Failure – Not an Option!
As you read this list, be open minded and excited, because if you can use this knowledge to your advantage, then you will be successful and again not be one of the statistical small businesses out there.
1. Poor Customer Service: I believe it can be said that you can have a bit higher prices, you can even be in the upper class of your industry, but if you have outstanding customer service at every moment, you will retain repeat clientele, and the consumer will pay your prices. If you want to stand out in your industry, regardless of what it is, just have excellent, reliable customer service, where the customer gets reliable, friendly human contact that seems to care, and you will have customers flocking to your business. Businesses fail because they don’t have this and the consumer will go to where they can get it. Not to mention, when you have a happy customer because of your great customer service, they tell 18 people, who tell 18 people, who tell 18 people and so on. Remember the opposite is true too, so if you they are unhappy, the same 18,18,18 happens, just not to your benefit, of course.
2. Incompetent Employees/High Employee Turnover: If your employees are either incompetent, or unhappy, so you constantly are having turnover, where you end up with employees in training, who also can come across incompetent, you then will loose business. Customers will go where they feel they can find someone who knows what they are doing and can satisfactorily help them. For tips on keeping employee turnover down, see June 2008 Top Ten Tips. Again the 18 formula will come into play, and you will sink your own ship.
3. Owner Procrastination/Disorganization: As the owner of a small business, you can sink your ship by trying to wear all the hats, instead of doing what you are good at, and delegating the duties you are not. This is a common mistake by small business owners, but if you want your company to thrive, grow and survive the statistics, you need to focus on growing it, and doing the things you know how to do best, not doing the things that you can delegate to others. So because the biz owner decides to do everything, he ends up having a mile high pile of paperwork and tasks to do, is unable to get focused on growing his biz, and then nothing really gets done, or the owner just does not have time for a life outside of his business. This is very common and very avoidable. It is wise to hire an assistant, a bookkeeper, and then anything that you might need after that. Any business consultant will tell you, you should hire very proficient individuals for these two positions, and then everything else will fall into place. So don’t let your business be a statistic, when you can delegate, and you then have time to make it very successful.
4. Cash Flow/Accounting: This cannot be emphasized enough! It is very common for businesses to go under due to cash flow problems, mistakes in accounting, tax non-compliance issues, out of control spending, not knowing what your bottom line is because you don’t read and use your financial reports and much more. Do not be one of those owners that “feels” like everything is fine, just “flies by the seat of his pants” and doesn’t really know where things are financially, because he barely has time to pay the bills, let alone analyze anything. I think that if there is a business killer, this is a BIG one. See Feb, Mar, Apr, and May 2008 Top Ten Tips for help with this area.
5. Ineffective, Sloppy or Non-Existent Marketing: Contrary to popular opinion, few products or services “sell themselves.” This is one of the biggest challenges in small business is the marketing piece. Because small businesses don’t market, they don’t grow. Sometimes you can make it on referrals for a while, but there will always come a time when you will need to aggressively pursue marketing. There are many avenues of marketing, direct mailings, cold call marketing, the internet, flyers, advertising in the local venues, etc. It is best to choose your revenue goals, and then set out on a marketing strategy to meet those goals. Choose your marketing approach, then execute it. I think the more personal the marketing the approach, keeping the human element in your marketing, the more effective it is. If you can find an effective cold caller, not just someone who can make calls, but actually cares about what they are doing, and the prospect they are talking to, you can have some very effective marketing. All other forms of marketing do not have this personal touch, and so is simply a numbers game, but if you can figure out what you want to do, use the most effective tools for your industry, then you will see your business grow. Without marketing, you will eventually become that dreaded statistic.
6. Inadequate Planning: Many small business owners do not plan out their entire strategy, which can easily cause failure. If you don’t have goals, and you don’t have a plan, then everything is “helter skelter” and you will eventually tumble into oblivion of non-existence. Whether you have a lot of money at the beginning or get a lot of money later on, if you don’t have goals and a plan, you will fail. It is a principle of life and business. If you don’t have plan, then sit down and make one. If you don’t know how, then find a mentor or consultant to help you, or go to your management staff to help you. Find help and make it happen. This ball is in your court and you are the one that can make it happen and make sure your business is around for many years to come.
7. Poor Capital Structure: You just simply take on too much debt, and don’t have enough capital. This is a simple equation, and numbers never lie.
8. Failure to control controllable cost: This is so easy to remedy, but because owners do not pay attention to those costs, or do not review their financial reports, or many other things, they spend all their money and are operating at a deficit, and eventually sink their ship. The saddest thing about this issue is that it is totally controllable and does not need to happen, yet it happens all the time!
9. Failure to Prepare for the Uncontrollable: Failure to prepare for the uncontrollable “rainy day.” There are things in life we cannot foresee, but we can be wise and prepare. This is another reason to be very familiar with where your business is financially, so you can save money and put it away for the “rainy day,” because we know that the rainy day always comes. If we think otherwise, we are being foolish, and again will become one of those statistics.
10. Management is in Complete Denial: This is the biggest reason that businesses fail. If you, as the owner are not paying attention, you do not open your eyes to your businesses performance, your customer service, your financials, your ability to adapt to the changing market, your marketing efforts, and be honest with your own strengths and weaknesses and how things are really going, your “ego” being too much in the way, your company will fail! You will become one of those statistics, sabotaging your own endeavors unknowingly. As said at the top of this document, most reasons that businesses fail are avoidable, preventable, just plain do not have to happen.
So, we hope you have found this helpful, enlightening and encouraging. The main thing that we want you to take away from these Tips is that you have full control of your business and you can make it happen, and it does not have to be that you are in the category of the 56% of businesses that fail in the first 4 years. Take hope! Be encouraged! Make it happen! Open your eyes, be honest and you will see your business flourish.
Business Failure Not an Option - To learn more about this author, visit Jacquie M. Adkins's Website.
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All of us in small business just don’t want to ever think we could be a part of the statistic that only two-thirds of new businesses survive for two years and 44% only survive to four years. There are many reasons that businesses fail and the thing of it is, most of them are within your control. We are stating some of the reasons that businesses fail here, but the encouraging thing about this list is, that you have full control of every single one of these issues, and so you just don’t have to fail, if you so choose.
As you read this list, be open minded and excited, because if you can use this knowledge to your advantage, then you will be successful and again not be one of the statistical small businesses out there.
1. Poor Customer Service: I believe it can be said that you can have a bit higher prices, you can even be in the upper class of your industry, but if you have outstanding customer service at every moment, you will retain repeat clientele, and the consumer will pay your prices. If you want to stand out in your industry, regardless of what it is, just have excellent, reliable customer service, where the customer gets reliable, friendly human contact that seems to care, and you will have customers flocking to your business. Businesses fail because they don’t have this and the consumer will go to where they can get it. Not to mention, when you have a happy customer because of your great customer service, they tell 18 people, who tell 18 people, who tell 18 people and so on. Remember the opposite is true too, so if you they are unhappy, the same 18,18,18 happens, just not to your benefit, of course.
2. Incompetent Employees/High Employee Turnover: If your employees are either incompetent, or unhappy, so you constantly are having turnover, where you end up with employees in training, who also can come across incompetent, you then will loose business. Customers will go where they feel they can find someone who knows what they are doing and can satisfactorily help them. For tips on keeping employee turnover down, see June 2008 Top Ten Tips. Again the 18 formula will come into play, and you will sink your own ship.
3. Owner Procrastination/Disorganization: As the owner of a small business, you can sink your ship by trying to wear all the hats, instead of doing what you are good at, and delegating the duties you are not. This is a common mistake by small business owners, but if you want your company to thrive, grow and survive the statistics, you need to focus on growing it, and doing the things you know how to do best, not doing the things that you can delegate to others. So because the biz owner decides to do everything, he ends up having a mile high pile of paperwork and tasks to do, is unable to get focused on growing his biz, and then nothing really gets done, or the owner just does not have time for a life outside of his business. This is very common and very avoidable. It is wise to hire an assistant, a bookkeeper, and then anything that you might need after that. Any business consultant will tell you, you should hire very proficient individuals for these two positions, and then everything else will fall into place. So don’t let your business be a statistic, when you can delegate, and you then have time to make it very successful.
4. Cash Flow/Accounting: This cannot be emphasized enough! It is very common for businesses to go under due to cash flow problems, mistakes in accounting, tax non-compliance issues, out of control spending, not knowing what your bottom line is because you don’t read and use your financial reports and much more. Do not be one of those owners that “feels” like everything is fine, just “flies by the seat of his pants” and doesn’t really know where things are financially, because he barely has time to pay the bills, let alone analyze anything. I think that if there is a business killer, this is a BIG one. See Feb, Mar, Apr, and May 2008 Top Ten Tips for help with this area.
5. Ineffective, Sloppy or Non-Existent Marketing: Contrary to popular opinion, few products or services “sell themselves.” This is one of the biggest challenges in small business is the marketing piece. Because small businesses don’t market, they don’t grow. Sometimes you can make it on referrals for a while, but there will always come a time when you will need to aggressively pursue marketing. There are many avenues of marketing, direct mailings, cold call marketing, the internet, flyers, advertising in the local venues, etc. It is best to choose your revenue goals, and then set out on a marketing strategy to meet those goals. Choose your marketing approach, then execute it. I think the more personal the marketing the approach, keeping the human element in your marketing, the more effective it is. If you can find an effective cold caller, not just someone who can make calls, but actually cares about what they are doing, and the prospect they are talking to, you can have some very effective marketing. All other forms of marketing do not have this personal touch, and so is simply a numbers game, but if you can figure out what you want to do, use the most effective tools for your industry, then you will see your business grow. Without marketing, you will eventually become that dreaded statistic.
6. Inadequate Planning: Many small business owners do not plan out their entire strategy, which can easily cause failure. If you don’t have goals, and you don’t have a plan, then everything is “helter skelter” and you will eventually tumble into oblivion of non-existence. Whether you have a lot of money at the beginning or get a lot of money later on, if you don’t have goals and a plan, you will fail. It is a principle of life and business. If you don’t have plan, then sit down and make one. If you don’t know how, then find a mentor or consultant to help you, or go to your management staff to help you. Find help and make it happen. This ball is in your court and you are the one that can make it happen and make sure your business is around for many years to come.
7. Poor Capital Structure: You just simply take on too much debt, and don’t have enough capital. This is a simple equation, and numbers never lie.
8. Failure to control controllable cost: This is so easy to remedy, but because owners do not pay attention to those costs, or do not review their financial reports, or many other things, they spend all their money and are operating at a deficit, and eventually sink their ship. The saddest thing about this issue is that it is totally controllable and does not need to happen, yet it happens all the time!
9. Failure to Prepare for the Uncontrollable: Failure to prepare for the uncontrollable “rainy day.” There are things in life we cannot foresee, but we can be wise and prepare. This is another reason to be very familiar with where your business is financially, so you can save money and put it away for the “rainy day,” because we know that the rainy day always comes. If we think otherwise, we are being foolish, and again will become one of those statistics.
10. Management is in Complete Denial: This is the biggest reason that businesses fail. If you, as the owner are not paying attention, you do not open your eyes to your businesses performance, your customer service, your financials, your ability to adapt to the changing market, your marketing efforts, and be honest with your own strengths and weaknesses and how things are really going, your “ego” being too much in the way, your company will fail! You will become one of those statistics, sabotaging your own endeavors unknowingly. As said at the top of this document, most reasons that businesses fail are avoidable, preventable, just plain do not have to happen.
So, we hope you have found this helpful, enlightening and encouraging. The main thing that we want you to take away from these Tips is that you have full control of your business and you can make it happen, and it does not have to be that you are in the category of the 56% of businesses that fail in the first 4 years. Take hope! Be encouraged! Make it happen! Open your eyes, be honest and you will see your business flourish.
Business Failure Not an Option - To learn more about this author, visit Jacquie M. Adkins's Website.
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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