Why Businesses Fail (and what you can do about it)
by Maria Marsala
No one sets out to fail! Most business owners read all the
statistics (maybe more than once) before they open their
doors. Many know the reasons why businesses fail. But some
businesses operate under this paradigm: "failure can never
happen to me because I know better." Is that you?
What most business owners miss is looking at the reasons for
business failure and turning them into action steps to help
overcome the odds of failure. How do I know? I once thought
I knew better, too!
Bear in mind that even "adolescent" businesses fail.
According to the SBA statistics, 90% of small businesses
fail within the first five years. Many businesses aren't
producing enough income because the business owners aren't
"business wise." They may be excellent at a specific task -
consulting, programming, massage therapy, web site design,
copywriting, etc. Or they have a great product. But wise
about the "business" of business, they are not!
In the past five years of my business, not one client
(including those who have been in business for more than 10
years) provided me with a business plan to review. Not one!
Two of 100 clients have had marketing plans, but marketing
plans don't work without a business plan and other focus
type tools, too. The other common (95%!) mistake I see (and
help my clients correct) is pricing their services very low
as a way to gain market share and new clients. So low, in
fact, that a potential buyer will perceive the service or
product as being cheap and of low quality, even when the
provider offers years of expertise. NO ONE wants to hire a
business that is cheap! Inexpensive - yes; affordable - yes;
cheap - no, no, no!
The most common problems business owners experience stem
from simple functions like streamlining, organizing,
information resourcing, marketing, planning, visioning,
languaging, communication, technology and ecommerce.
Example: If you know that most businesses fail because they
don't have a usable business plan, develop your own business
and marketing plans and use them daily; don't create one
that gathers dust on a shelf. I use the One Page Business
Plan Book or Interactive CD by Jim Horan. It helps business
owners create very realistic, focused, and well thought-out
business and marketing plans, including scorecards to help
you anticipate and avoid business problems.
Example 1: Recently, a client turned down an opportunity to
teach computer classes on a subject she could easily teach.
Using teaching to market her business is on her marketing
plan. So why not? Well, the proposed classes weren't going
to help her get business for her primary business, they
weren't going to attract her ideal client, and the pay was
much lower than her usual hourly rate. She felt confident
about declining the offer. Of course, that same week, other
new business - the type she really wanted - came her way!
Example 2: New client knows she wants to create a business
plan. She also has a strategy of increasing her income by
joining four organizations with networking opportunities for
her to meet her ideal clients. She joins the first two
groups - total cost: $400.
As she starts her business foundation work, which includes
the One Page Business Plan, she realizes that her ideal
client isn't whom she originally thought it was! Some
clients might be found in the two groups she's already
joined, but not her ideal clients. As a new business owner,
she wants to spend her time around her ideal clients, first
and foremost. Planning just a little more for her business
would have saved her $400 in membership fees.
What other simple things can you do to build a solid
business foundation?
· Use a one-page plan daily to create your to-do list and
monitor your business.
· Create an Ideal Client Profile and Elevator Speech and
define a niche for your business.
· Read one of the "E-myth Revisited" books by Michael
Gerber.
· Go with your strengths. Hire individuals whose strengths
ARE your weaknesses to "fill in the gaps."
· Remember that there is no need to repeat the SAME mistakes
others have made.
· Know what your business exit strategy will be.
Most business owners don't know what they don't know. Get
assistance by hiring non-biased professionals who help you
realign with your vision, create plans and financial
scorecards to monitor your business. Look for someone who
can suggest resources to help you and your business grow.
Someone who's been in your shoes and succeeded. Start
looking at how having a partner - a business consultant,
coach, counselor, strategist, organizer or planner - can
help you grow your business.
Ready to learn more about business success? Take a look at
the articles I found on business failure that are posted
below, (http://www.coachmaria.com/articles/succeed.html).
Learn to overcome the costly (both in money and your time)
errors that other business owners have already made. Give
your business a fighting chance to continue to succeed.
© 2004 Maria Marsala, business builder who helps women-owned service businesses increase their bottom line in less time. A former Wall Street trader and manager, she used her business expertise to create 6 S.I.M.P.L.E. Business Steps, a program developed to help her clients succeed in less time. Learn more at http://www.ElevatingYourBusiness.com
| DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware. |
More Online Business Help Articles
More By Developer Shed
 developerWorks - FREE Tools!
|
Join this Rational Talks to You teleconference, featuring Paul Boustany and Mark Krasovich, to speak to the experts about becoming a Rational ClearCase power user. Get a chance to ask your questions and learn tips and tricks for using Rational ClearCase in Agile development
FREE! Go There Now!
|
|
|
|
David Barnes, Lead Evangelist for IBM Emerging Internet Technologies will discuss aspects of Web 2.0 that bring value to corporations, academia, and government. He'll also discuss IBM's vision around Web 2.0, including the importance of remixability and consumability. The discussion will culminate with examples of various IBM Software Group solutions you can use to get ahead of the Web 2.0 adoption curve.
FREE! Go There Now!
|
|
|
|
You probably have thousands of lines of COBOL code loaded with business intelligence and being used to run your business, along with an army of developers maintaining these applications. Learn how to prepare your applications and developers so you can keep that competitive edge and move to a service-oriented architecture with the IBM Rational Enterprise Modernization solutions. Replay is available for 9 months.
FREE! Go There Now!
|
|
|
|
Visit IBM developerWorks to download a free trial of the latest release of IBM Lotus Sametime Standard V8.0. Lotus Sametime Standard V8.0 is a platform for unified communications and collaboration that combines security features with an extensible, open solution including integrated Voice over IP, geographic location awareness, mobile clients, and a robust Business Partner community offering telephony and video integration.
FREE! Go There Now!
|
|
|
|
In this tutorial, you can learn how to install and configure the IBM Rational Asset Manager Eclipse client, explore the different views in the Asset Management perspective, learn various search techniques, work with existing assets, and submit a new asset.
FREE! Go There Now!
|
|
|
|
Portfolio Management is about effectively managing portfolio value by aligning portfolio investments with business goals. This complimentary e-kit provides a collection of materials that can help you understand how IBM Rational enables and automates best practices for improved governance and clear visibility into portfolio and project performance across the entire IT project lifecycle.
FREE! Go There Now!
|
|
|
|
Learn how to do more with your reusable assets with the free Rational Asset Manager eKit. The eKit includes demos on how Rational Asset Manager tracks and audits your assets in order to utilize them for reuse. Plus you’ll find white papers and a Webcast that discuss the challenges of a Service Oriented Architecture and how Rational Asset Manager can provide quick and effective solutions.
FREE! Go There Now!
|
|
|
|
Try the latest version of IBM Rational Manual Tester V7.0.1 by downloading a free trial from IBM developerWorks. This manual test authoring and execution tool promotes test step reuse to reduce the impact of software change on testers and business analysts and addresses the needs of teams performing at least a portion of their testing manually.
FREE! Go There Now!
|
|
|
|
Join this webcast to learn how IBM Rational's Functional Testing solution enables you to implement automation your way, at your pace, with your existing staff. In this webcast, you’ll learn how you can eliminate redundancy of manual test scripts, reduce errors, and increase test coverage through test automation. After this presentation you will understand how IBM Rational Functional Testing solution can streamline your manual testing and make test automation easily attainable.
FREE! Go There Now!
|
|
|
|
Viper 2 brings a great value to developer communities including SQL, XML, PHP, Ruby, .NET and Java. You probably already know that DB2 Express-C is free for developers to develop, deploy and distribute. Viper 2 provides a variety of means that help move your application from the development stage to deployment more rapidly. This webcast shows how to best utilize the latest tools available for developing DB2 applications.
FREE! Go There Now!
|
|
|
|
All FREE IBM® developerWorks Tools!
|
/ 1 
