|Navigation: | Home | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 ||
The 7 Major Reasons Businesses Fail and How to Overcome Them
This year, over 800,000 of the approximately 2,000,000 start up businesses will fail!
Nearly 1,000,000 of those remaining will fail within 3 years. Why do so many businesses fail? Many studies show that approximately 98% of all failures occur because of the owners. The other 2% are a result of acts of God. Here are the key reasons and actions owners can take to avoid and overcome business failure:
Reason #1: The owner is not mentally prepared or motivated to run a business. There are three different ways to use your energy, and your physical and mental efforts to earn money. I call them the three "Games of Work.," and they define the types of relationships between people and their work. The rules that players have to follow to succeed for each "Game" are shown below.
1. Bureaucrats,: Do what it takes to protect or expand their position; Will divert responsibility whenever possible, but will take credit for desirable results of others; The success of the organization is secondary to kissing up to those who make decisions about promotions, salaries and job security; Have virtually no control over their job security; And are compensated for basically showing up.
2. Partial Entrepreneurs: Choose to be responsible for work performed or results achieved in their specialized field, but do not want responsibility for the total business. Have more control over their job and its security; And are paid for the specific results they produce. Examples of Partial Entrepreneurs include; commissioned salesmen, multilevel marketing members, franchisees, and real estate agents.
3. Business Owners: Take full responsibility for their business; Are in full control over their job and its security (whether they know it or not); Have no one in the organization to kiss up to; Learn to pass on as much credit as possible; Constantly focus on the success of the business; And are compensated only from the profits of the business.
As you can see, the rules of a Bureaucrat and a Business Owner are completely opposites in all categories, and the Partial Entrepreneur is basically in the middle. The mental effort it takes to convert from Bureaucrat or Partial Entrepreneur to Business Owner is much greater than most people realize. Many business owners never fully make the transition.
Action: Before becoming a business owner in the first place, determine if you truly want and will operate under the Business Owner "Game Rules." If you choose to, do so IMMEDIATELY, and COMPLETELY! To survive, let alone succeed, you must commit to operate under the Business Owner Rules 100%. Otherwise, you should seriously consider playing one of the other "Games of Work" that best suits your desires.
Reason #2: The business owner is unable to operate a business. The success or failure of a business depends on the owner. As the head goes, so goes the body. Running a business is completely different than any other "Game of Work," but, believe it or not, the rules are the same for all types of businesses. Far too many owners fail to take the time and energy to improve their own ability to run their business. This means that they need to grow as a person first and enrich themselves and discover their true passions and priorities to be able to have the maturity, drive, and energy to allow them to manage themselves and a business simultaneously.
Action: You will greatly enhance your chances for success by finding methods of self-improvement in all aspects of running a business, and continue the process throughout your entire business-ownership career. Obviously, as you become better at running your business, the success of your business will also get better. Many resources are available to you, including respected advisors, mentors, partners, "Godfathers, " and coaches.
Reason #3: The business owner thinks he knows what it takes to run a successful business and is convinced he is fully prepared to jump in. This is rarely true. The fundamentals of owning and operating a business sometimes referred to as the "rules of the game," are rarely taught in the U.S. school system. (See Global Entrepreneurship Monitor, published by Babson College and Kauffman Center for Entrepreneurial Leadership, July, 1999.)
We are led to believe that an education fully prepares us for running a business. In truth, the U.S. school system only prepares us to get a job, not create jobs. The fundamentals of successfully owning and operating a business are very different from getting and keeping a job. Unfortunately, most business owners are left to learn these fundamentals through the age-old process of "Trial and Error" with an emphasis on error. This "Trial and Error" dependence causes far too many serious and fatal errors, and leads to stress, financial damage, and eventual failure.
Action: Learn the rules of the game of business, other than through the "Trial and Error" method. The very best way is to find and use trusted mentors, advisors, and/or coaches to guide you through the process of learning how to improve your capability to run your business to avoid the many errors others make. Frankly, the rules are simple, easy to learn, and are based upon common sense, and high integrity
Reason #4: The business owner tries to execute all three of the three basic functions needed for a business to succeed, alone and without help. (See The E Myth Revisited by Michael Gerber). The three key functions a business must have executed to succeed are:
The Technical function, which is the execution of the actual service or product provided by the business. For example the drafting action of a drafting company, the auto repair actions of an auto repair company, the production of a boat of a boat building company.
The Managerial function, which is the organization, coordination, and supervision of the people assets and activity of the business on a day to day basis.
The Visionary function, which is the discovery, setting and communication of the future goals and purposes of the entire business. The leadership to get all parts of the business flowing towards the long term goals established.
The level of success of a business is limited to the level of the execution of the weakest link of the three business functions described. A business that has two of the functions executed in an excellent manner and the other in a poorly manner will eventually level out no higher than poor.
Yet, entrepreneurs (budding business owners) and business owners try to personally perform all three functions themselves. One single person will have an extremely difficult time performing all three functions at a high enough level for the business to eventually succeed.
Michael Jordan, one of the best basketball players of all time, could not translate his huge basketball skills into a successful baseball career. He proved that the skills needed to succeed at the game of baseball are much different from the skills needed to succeed at the game of basketball. And when he returned to basketball, he had to work extra hard to re-sharpen his basketball skills to his previous levels. Likewise, the skills of owning and operating a business are specific and very different than the other two "Games of Work."
Action: Get help from someone, a partner, an employee or an outsourcing resource to perform at least one of the two functions for the business. This way that function can be executed at a very high level and will allow you to focus on executing no more than the other two at a similar high level. Normally entrepreneurs initiate businesses where they bring the technical skills and motivation to the table.
The three skills necessary to win in the business game are: Technical Skills of the business; Managerial Skills to manage yourself, time, things, concepts, and people; and Visionary Skills to set future goals and organize the business so that current activities will contribute to them (See The E Myth Revisited by Michael Gerber).
You probably bring Technical Skills to the table, but to succeed, you will also want to master the Managerial and Visionary Skills. You are not born with these skills; you learn them. You are born with natural talents towards certain skills, but you have to work to perfect them. Michael Jordan, and Tiger Woods were obviously born with unbelievable talents, but they became successful only because they worked very hard at developing the skills they needed to win. Likewise, you will want to work to develop your Management and Visionary Skills (from the Business Owners Perspective) and continue the process throughout your business ownership career.
Reason #5: The owner starts a business for the wrong reason: "No one can boss me around;" Or; "I will create my own job;" "If he/she can be successful, so can I;" "I will buy a business and enjoy the fruits of ownership;" "I want to pursue my passion for serving others." And so on. The stresses and problems resulting from running a business for the wrong reasons can become overwhelming, especially when you generate little or no profits.
Action: "The only reason to have your own business is to Make a Profit." Though this may sound cold and greedy, you will realize rewards and compensation only from your business profits. If your business doesn't make a profit, you get nothing. You might even discover you have been working for nothing, or worse, working to increase your debt.
This does not mean you have to avoid meaningful, and emotional reasons for living. Not at all. The profits and personal time gained from the business will provide you the resources to pursue your life goals. Even religious institutions require profits and time to pursue their passion of serving others.
Reason #6: Business owners do not completely consider the perspective and motivations of potential customers. Customers' perspective must be addressed so owners can entice enough customers to buy their products or services at a price over their costs to produce the desired profits. From the very beginning, owners should be focused on enticing customers to buy. Owners who do not know, understand, or appreciate their potential customers' perspectives will most likely see their business fail.
Action: Learn as much as possible about your potential customers. Design and provide products or services, delivery methods, pricing, and ways to communicate with them around their perspective. This might require that you get help stepping out of your own perspective and into someone else's.
Reason #7: Business owners insist on going it alone without asking or accepting outside help. The sole business owner has one of the loneliest positions in the world. Many owners have difficulty confiding in their employees, vendors, customers, lenders, or competitors, for fear that any one of them will take advantage of revealed weaknesses. Most owners try to go it alone by working IN their business, and not near enough time working ON the business. Consequently, they are not aware of what they are doing, where they are going, or why! (the "Trial and Error" method).
Action: Find and use Advisors, Mentors, Coaches, and/or Trusted Partners who have the knowledge and desire to educate and guide you, with your best interests at heart. All professional athletes have one, if not several, coaches, advisors, mentors, who help them become much more successful than they ever could be on their own. Coaches evaluate your ability to run your business. They will bring you outside the stress, money, and time pressures you feel from working IN the business, to help you make the changes to result in improving your profits and reducing your pressures. You will become much more successful with advisors. Asking for help is not a sign of weakness, but a sign of your desire to improve. Learning from the trials and errors of others is an enjoyable and profitable experience. Once you find the right advisors, you learn to prevent and correct mistakes you might otherwise make.
Provided as an educational service by Bill Dueease of The Coach Connection, where "connecting great people with great coaches" is their goal. You may receive a free copy of the article "10 Insider Secrets Most Business Owners Never Learn" by contacting The Coach Connection at 800-887-7214 or 239-415-1777 or email@example.com, or at http://www.findyourcoach.com/0o-business-coach.htm
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 429, exiting
Realism vs. Optimism in the Business Plan
The most important function of a business plan is to create interest among investors so that they write a check. In achieving this goal, business plan writers are often challenged by determining the proper level of optimism in their plan.
What Kind of Business Should I Start?
It's not uncommon to reach your 30s, 40s or even 50s and still wonder, "What do I want to be when I grow up?" Few people are fortunate enough to be certain of their destinies early on and the rest of us are forced to do some soul searching.The desire to own a business is becoming more common as workers grow more frustrated with the economy and working in corporate America.
Become a Recognized Authority in Your Field - in 60 Days or Less!
You don't have to be rock-star famous before you are recognized as an authority in your field. You just have to begin to get the word out.
Playing Hookey Can Help! A Surprising Secret To Small Business Success!
Would you like to increase your chances of business success by 350%? The good news is that you can! Before you start working harder or learning the latest business theories so you can work smarter, try something different. You can increase your chances of success by as much as 350% by being more innovative and uncovering dramatically different ways to look at your business and develop your product or service.
Getting Rich Isnt a Bad Idea
You've seen plenty of articles claiming to offer you the secret to getting rich. Some ideas, however, are thin veneers covering some scheme that often involves multi-level marketing or a service with questionable intents.
Find Out If You WILL Be Successful As a Franchisee?
Will I be successful as a franchisee?One of the soundest pieces of advice to take when considering becoming a franchisee is to 'Assess Yourself'. Assess whether you can accept direction.
Face The Fear, Ladies
Okay, I'll begin by telling you that I've been divorced for about 5 years, have an amazing family and by anyone's standards, I have a wonderful life.I worked in the film industry for almost 9 years for my ex-husband's company.
How to Become a Successful Entrepreneur on the Web
Becoming a successful entrepreneur in the online world is no different than becoming a successful entrepreneur in the brick-and-mortar world. Both tasks require vision, determination, and hard work.
Have You Been Thinking About Owning Your Own Business? Or Becoming An Entrepreneur? Part 1
Almost every day, I talk with people who want to start their own home-based businesses. I receive an interesting reaction when I ask people, "What are you looking for in a home-based business?" The most common response I get is, "Umm, well .
Could a Non-Profit Structure Be Right for Your Business?
If you have a business idea, or an idea for a servicefor your community, there's one decision you must makeearly on: are you going to structure your project as afor-profit business, or as a non-profit corporation?Now, it may be that you already have a clear idea aboutthis. Some business ideas are clearly "for profit".
Work On, Not In Your Business
Are you busy? Everyone's busy! Ask anyone they'll tell you how busy they are. But how many people are accomplishing real results?In your small business, it's easy to get buried in the myriad activities that demand your attention each day.
Starting Up and Keeping Going
So you had that fantastic business idea, the one that'sgoing to be wildly successful and make you a fortune - andeven better, you actually did something about it and startedyour own business. Good for you! Not everyone gets eventhat far.
Angel Investors: 7 Online Business Plan Scams and 1 Real Deal
We've all seen the hype: "We'll put your plan in front of thousands of investors!" "We'll write you an award-winning online business plan!" "Only $3,000 for thousands of investors to learn about your company!"I cringe every time I see one of these ads. Vultures are preying on honest business people who want to fund their businesses.
Go Slow to Go Fast - Why Over 80% Of High Tech Startups Fail And What To Do About It
With billions of dollars of venture capital residing down the street on Sand Hill Road, two Stanford professors are attempting to answer a fundamental question "why does it always take longer and cost more to build a hi-tech company than anyone ever expects?" For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80% of venture capital investments do not pan out. While the reasons for this high attrition rate are too numerous to list here, a simple fact defines every successful investment - the company figures out how to bring in more money than it spends.
The Fear Factor
I recently conducted a lil' survey asking my colleagues what were their biggest fears when thinking about starting a business or running their business. The following are the top three fears that resulted from my survey and some ways to combat them.
Solving the Million Dollar Mystery: 4 Steps To Create A Turn-Key Business
You're a smart, hardworking entrepreneur, and you're moving fast. You are highly educated in your field and your business is growing and getting busier each day.
The Heroic Entrepreneur: Profiting from Your Brilliance
If you look up the definition of hero in Webster's, you'll find a definition something like, 'A person noted for feats of courage or nobility of purpose, especially one who has risked or sacrificed his or her life: soldiers and nurses who were heroes in an unpopular war'. Some heroes in our lives have earned that badge of honor by doing something everyone feels is heroic as defined in the traditional sense, whether it's running into a burning building to rescue a child, pulling an injured woman from a car accident, or fighting the enemy in the time of war.
How Entrepreneurs Make Money Selling Global Brands On and Off-line
Did you know that thousands of companies from all over the world are looking for enthusiastic individuals to represent their products overseas? That person can be you. From Chinese toys to Brazilian bikinis people are making money reselling all kinds of products for a profit.
A Startup Never Closes
When it comes to a startup, the luxuries shared with established companies are few and far between. Chief among them is the luxury to close at the end of the day.
Communication is the key to vendor relations. In your small business, you will be in need of many products and services.
|home | site map | contact us|