The Chief Cause of Business Failure & Success
Business rises and falls on leadership. According to business guru, Brian Tracy, “Leadership is the most important single factor in determining business success or failure in our competitive, turbulent, fast-moving economy.” Still not convinced? Based on a study by Jessie Hagen of the US Bank, here are the main reasons why businesses fail: • Poor Business Planning
• Poor Financial Planning
• Poor Marketing
• Poor Management Proper application of these key factors is a function of good leadership. Let’s look at some of the conclusions of the US Bank report. According to Hagen’s study, in the Business Planning category, 78% of businesses fail due to lack of a well-developed business plan. It boggles my mind that so many people go into business without a plan, as if it were the ice cream flavor-of-the-month! Is it any wonder that when I came across the DEA Police & Government auction site of confiscated property, there is a gleeful statement that declares, “Most businesses fail within their first two years, so chances are, you will come across some relatively new merchandise. At (our) auction, get what you need without paying full price.” If you just rolled out of bed with ‘a great business idea’ and don’t want to be a part of this grim statistic, run to your nearest bank, get a free business plan template, and write your plan now! Honor the time-proven cliché, “If you fail to plan, you plan to fail.” Leadership is about planning for success before it happens. Sun Tzu, the 6th century Chinese philosopher, in his epic work The Art of War, gave some sound business advice that still applies today: “When your strategy is deep and far-reaching, then what you gain by your calculations is much, so you can win before you even fight. When your strategic thinking is shallow and near-sighted, then what you gain by your calculations is little, so you lose before you do battle.” In the Financial Planning category, a whopping 82% of businesses failed due to poor cash flow management skills followed closely by starting out with too little money. Business leadership is about taking financial responsibility, conducting sound financial planning and research, and understanding the unique financial dynamics of one’s business. Before even starting a business, show your plan to your accountant and get their counsel. What a concept! Asking for the advice of someone who sees the bottom-line realities of business day in and day out; someone who sees the birth certificates, successions, and autopsy reports of thousands of business entities. It just makes good business sense. But many people will ignore this advice and eventually meet with business disaster. [Word of caution: don’t rely on just one opinion. Get at least two or three opinions from different accountants to get a more informed view]. The third business failure factor profiled in the report, and a critical one, was Marketing. Over 64% of the businesses surveyed in the Marketing category failed because of owners minimizing the importance of properly promoting their business followed by ignoring their competition. Again, as a business leader, you must be able to effectively communicate your idea to the right people and understand their unique needs and wants. Leadership is all about taking initiative, taking action, getting things done, and making decisions. If you’re not doing anything of significance to market and promote your business, you are most likely headed for business failure. I recommend every time you get up in the morning, jot down 5 new things you can do to promote your business and go DO them! If you can’t think of anything to jot down, I highly recommend reading Jay Conrad Levinson’s book, Guerrilla Marketing, which has oodles of useful information and tips on promoting for small business. Know your competition. Leadership is also about providing value to people. If your main competitors are all providing a better quality and lower priced product than yours, how can you possibly create any value? Either you harness your strengths to provide different benefits such as speed, convenience, better service; lower your price and improve quality; create a different product for an unmet demand; or get out of the game. Finally, one of the most important reasons why businesses fail is due to poor management. In the Management category, 70% of businesses failed due to owners not recognizing what they don’t do well and not seeking help, followed by insufficient relevant business experience. Not delegating properly and hiring the wrong people were major contributing factors to business failure in the Management category. Leadership is about knowing yourself – understanding your strengths and weaknesses. Leaders are aware of their potential. Losers ignore their potential. Leadership is ultimately about influence and delegation. As a leader, you must have the humility to be able to surround yourself with people who are brighter than you and who can make up for your weaknesses and limitations so you can do what you do best: seize the day and lead! ■ Sharif Khan is a professional speaker and author of “Psychology of the Hero Soul,” an inspirational book on awakening the Hero within and developing people’s leadership potential. You can reach him at sharif@herosoul.com or by visiting http://www.herosoul.com Sharif provides inspirational keynotes and leadership development workshops that entertain, educate, and empower. To book Sharif as a speaker for your next event call: (416) 417-1259. |
Other Articles
The Monster Garage of eLearning Have you seen Jesse James on the Discovery Channel's Monster Garage? Each week Jesse and his handpicked team create a customized vehicle to dazzle and amaze you. So what does this have to do with eLearning? Read on... ...Your Secret Power--Don't You Want to Know When someone comes to you and wants to tell you about a thing you do not know about, why are you so defensive?When you go to someone and ask them about a thing you know nothing about, why are you eager to hear everything they say? It is because of fear-not fear about learning something new, but fear of a realization of what we knew as no ...Super-Success: Five Steps Successful people, whether they are in business, government, non-profit or a professional field have five characteristics in common. These characteristics distinguish them from those who are in the middle of the pack. Some leaders have displayed these since their youths. Others have learned them, in many cases painfully, over the years. With ...Adversity, What Is It Good For? As I sat down to write this article, I was reflecting back over the last week – a week filled with adversity. We all go through it and it is during those times that we may often wonder what is it all for anyway? What is the point? What is it good for?I decided to look up the word, adversity, from my old American Heritage Dictionary. The w ...Inspiration: A Key to Affiliate Marketing Success Running your own business can be a challenge, and doing it as an affiliate marketer can be even more trying.It's not that it isn't a wonderful way to make a living. It is. However, you are forced to rely on your own wits and your income is completely dependent upon you. There is no boss to cut a check every two weeks, and a few slow days ...Relax. It's Just Your Life What am I supposed to do with my life? Shouldn't I be doing something...well...more?These questions haunt everyone from time to time. Personally, I can't count the number of times my acquaintances and I have batted this philosophical shuttlecock around a conversational circle. More often then not, the discussion gets bogged down in ...The True and Magnificent Power of Giving You've probably heard of the popular saying "It's better to give than to receive." But do you actually know what hidden power lies within this magnanimous act known as "giving?"When you give something from your heart without expecting anything in return, you release a powerful force that will trigger your good deed to "bounce" back to ...Dreaming With Intent III In previous articles of this series, I simplistically outlined how awareness functions within the capacity of two distinctly different and necessary areas of the mind. The balance between the influences of the waking mind and the sleep or dream state of mind can drastically affect how we develop and utilize our faculties for dealing with percep ...Chandra Leigh Brown: The Soul of a Survivor Chandra Leigh Brown is a woman who lives a life of dedication and perseverance as she fights for the rights of the disabled, and differently-abled. Following a horrendous car accident where she was ejected through her car's window, Brown suffered multiple fractures and a severe brain injury. Left on life support, she was not expected to live. ...Mirror, Mirror A mirror does not lie. A mirror reflects light, although that light can be distorted, it is an accurate duplication of what is in front of it.A mirror is also a transformer-it transforms three dimensional images into two dimensional images. A mirrored reflection is as lifeless as the image it is reflecting. A mirror cannot reflect life, o ...Things I Wish I Had Always Known What an exciting journey life can be! We were taught so many things growing up, to be polite, to respect others, to go to school and get good grades. We weren’t taught some very important things, probably because they are only learned through the school of “hard knocks.” I must have been absent that day but life lessons and challenges present ...Use Rose Essential Oil for Depression and Fatigue Rose oil is one of the most popular essential oils. It has a rich floral fragrance conjuring up images of romance, luxury and pampering. More importantly its properties are said to be: AntidepressantCalming, Soothing, Relaxing, RestfulSensuous, AphrodisiacUpliftingBalancingImproves confidence ...Passion – The Why to Achieving Maximum Success Passion is an important word and finding passion is on the minds of many individuals. A recent search of this word through an Internet key word program revealed passion had over 5 times the searches within one search site than the word success.So what is the big deal about passion? Probably, most individuals realize that to achieve ma ...What Gift to Give an Employee? When you have a client that increases their business with you, or an employee who deserves some extra recognition, a small gift of appreciation will go a long way. The hardest part of gift giving is knowing what to give for each occasion. Gifts can range from a personalized item to a common houseplant. The following is a list of gift ideas to co ...Little Blessings That Grace Our Day What is it about being human that makes it so easy for us to find fault instead of favor?Here's what I mean. It is so easy to get caught up in what is wrong with our lives. Have you ever complained to a restaurant manager about a snotty server, cold food or bad service? Legitimate complaints, perhaps, but how did you react? Were you cal ...Acts of Kindness Go Round and Round Today was a very special day for me. A friend asked me to drive him to the hospital for a special test. I said yes and we made our trip to the hospital.When his name was called to proceed behind the door for his procedure an unusual drama unfolded in front of me in the waiting room.A frail, confused, elderly gentleman in his eighti ...The Monkey With The Wooden Apples There once was a happy monkey wandering the jungle, eating delicious fruit when hungry, and resting when tired. One day he came upon a house, where he saw a bowl of the most beautiful apples. He took one in each hand and ran back into the forest.He sniffed the apples and smelled nothing. He tried to eat them, but hurt his teeth. They were ...How to Cope When Your Spouse is Depressed Living with a depressed spouse can be extremely stressful for the partner and other family members. Communication is impacted, the couple’s social life suffers, and feelings of satisfaction with the marriage decrease.Here are fifteen ways to cope and keep your sanity and bearings when your spouse is depressed:1. Know what you’r ...Live Simply, Love Patiently A wise Indonesian elderly woman who Pastors a church in Sydney, Australia once said: "Live simply and simply live."A Russian young lady who once dated my brother said: "I did not know, what love is earlier, and, of course, there are different kinds of it. Now I know, it is not when one is weak and let's another behave bad and not thinking ...Forgetfulness As I first started writing this newsletter, it was the morning of Sunday, September 10. NPR was on in the background, filled with the same talk as every other media outlet in the land: the five year anniversary of 9-11. For the three days leading up to the infamous date, every time I flipped on a TV or radio or read through a news story, there w ...White Sun - A Free Person As human beings we have the complete spirit of God and a divine nature which is full of vibrant and full of energy. Unfortunately, we are restricted by inherited past and our nature is obscured by desire for material gains. Hence we follow the path of fate like puppets dancing on the string of karma if we live a life not knowing that we can chan ...
|