Tweet

How to Avoid Business Failure

Written by: Leanne Hoagland-Smith

Article Overview: Business failure is still very high. Why do you think businesses fail? Read to see if you have the answer.

How to Avoid Business Failure

Why do businesses fail? The Small Business Administration in 2004 (latest year for available date) identified the launch of 580,900 new employer businesses and the closing of 576,200. This report suggests that for every business failure another business opens.

Many business writers, business consultants and business coaches attribute business failure to a lack of strategic planning, a lack of leadership, a lack of vision, a lack of processes, the list is endless. Dan Kennedy, a renowned marketing and sales expert said that there is no business success or failure, but rather people success and people failure. However, the problem with identifying one reason for business failure is the problem.

Businesses are complex by their very nature. To believe that only one factor will either make or break a business is foolhardy and contributes to the silo solution mentality. This approach is simply stated like this: "If I fix this one problem, then everything else is OK."

Successful businesses harness what I call the dynamic forces of performance – strategic planning, execution and measurement. These forces, much like the forces in nature, act upon each performance change field such as profitability, customer service, growth and innovation to name a few. When all 3 forces are in alignment, the field experiences tremendous energy and improved performance happens.

Processes help to unite the forces and close any performance gaps between the forces. People development process links planning and execution. Many companies have great planning capacity, but fail to execute or implement the performance change.

Even if strategic planning and execution are OK, sometimes measurement of the desired results is still lacking. A goal achievement process helps to bridge this gap.

Between measurement and planning is the process of quality. Reviewing the quality of the performance field helps to not only improve measurement, but establishes a high performance culture of continuous improvement.

All of these forces and processes operate within the eye of leadership. Effective leadership is necessary to manage each of the forces as well as the processes. If leadership is not present, then the forces fail to maximize their impact upon the field.

Take the time to look at the forces within your business along with the processes. Implement action where necessary so that you will be one of those businesses that will not fail.

Related Articles
  The Gravity of Failure
  Failure and Risk
  Question of the Day: What will you do with your failure?
  Fear: The biggest obstacle to success
  POSITIVE THINKING

Article Tags:



Related Forum Posts
These maybe the coldest franchises out there: - Here are the worst 15 performing franchises in regards to having the highest Small Business Administration (SBA) loan failure rates. The list is dotted with sub sandwich shops, fitness centers and car shops. WORST FRANCHISE LOAN FAILURES Failure % 1 OBEE'S SOUP SALAD SUBS 55.56% 2 LADY OF AMERICA 41.94% 3 COUNTRY CLUTTER (BED & BREAKFAST) 41.18% 4 COPY CLUB 36.36% 5 ALL TUNE AND LUBE 35.71% 6 PICKERMAN'S 35.71% 7 PHILLY CONNECTION 35.59% 8 ROLY POLY ROLLED SANDWICHES 34.78% 9 COTTMAN TRANSMISSION 34.48% 10 HAIR COLOR EXPRESS 33.33% 11 LEE MYLES AUTOMOTIVE TRANSMISSIONS 33.33% 12 GODFATHER'S PIZZA 33.33% 13 SMOOTHIE FACTORY 33.33% 14 BLIMPIE 31.39% 15 GOLF U.S.A. (RETAIL GOLF EQUIP.) 30.77% Source: Small Business Administration, SBA Loan Performance Within Franchise Code for the Period of FY 2001 - 2005
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Why A Project Fails? - Hello Everyone As the size and complexity of ones business grows, so does their need to effectively manage projects. I have been thinking about the major reasons why a project can go wrong and my limited experience comes up with the following. 1 Leadership: A project manager with leadership skills and not just management skills. 2 Failure to (Foresee and) Plan 3 Failure to Manage: Ineffective change management control methods. Unclear decision making guidelines. 4 Talent: Finding, allocating and developing people 5 Scope: Setting an overly ambitious or amibigious project scope 6 Alignment: When projects are not prioritized in alignment with the business strategy, or project members personal objectives are not in tandem with that of the project / company 7 Lack of Candor: Communication Breakdowns I would be interested in knowing everyone's thoughts on this, especially on ways to overcome the above mentioned obstacles. Cheers!
Top performing Franchise Loans - Evan, There are over 120 Franchises listed by the SBA with 0% Loan Failure from 10-1-00 to 9-30-05 these companies have at leat 10 loans disbursed. A number of the companies are Hotel/Motel Franchises so I listed them separately. Since all the ones listed have 0% loan failure I listed them descending by # of loans disbursed. Top 20 (by # loans Disbursed) 0% SBA Loan Failure (does not include hotels/motels) 1 21425--CULVER'S FROZEN CUSTARD 85 2 66910--PRIMROSE SCHOOL (DAYCARE) 76 3 14467--CARTRIDGE WORLD STORES 54 4 68021--QUIZNO'S SUBS 41 5 06560--AUNTIE ANN'S (SOFT PRETZELS) 40 6 29912--FIREHOUSE SUBS 35 7 31154--FOOT SOLUTIONS 35 8 52707--MEDICAP PHARMACY 35 9 09802--BEN & JERRY'S ICE CREAM 33 10 67759--COMFORT SUITES 33 11 70150--RITTER'S FROZEN CUSTARD 32 12 05650--ARBY'S 31 13 65160--PLATO'S CLOSET 31 14 67417--PUMP IT UP 30 15 69149--REMAX 30 16 71456--SALAD WORKS, INC. 30 17 76282--SONIC DRIVE-IN 27 18 84725--UNION 76 OIL 27 19 17049--CHRISTIAN BROTHERS AUTOMOTIVE 26 20 78950--SUNOCO SERVICE STATION 26 Top 10 0% SBA Loan Failure Hotel/Motels 1 10275--BEST WESTERN INN 104 2 67750--COMFORT INN 98 3 38605--HOLIDAY INN EXPRESS 87 4 36680--HAMPTON INNS 57 5 53165--MICROTEL 33 6 75385--SLEEP INN MOTEL 26 7 04160--AMERIHOST INN 18 8 69134--RED ROOF INN 13 9 17230--CLARION INN & SUITES 11 10 20715--COUNTRY INN 11
Re: Search Engine Friendly Web Development - I would like to add some more things in search engine friendly web development. 1. PPC campaign 2. Viral marketing 3. Social Media Marketing Avoid flash in website and other use CSS files to shows the content style.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Angel Investors Where Are You?

How To Become A Member of the Paparazzi

TOP Level Selling

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.