It's often said that more than half of new
businesses fail during the first year. According to the Small Business
Association (SBA), this isn't necessarily true. The SBA states that only 30% of
new businesses fail during the first two years of being open, 50% during the
first five years and 66% during the first 10. The SBA goes on to state that
only 25% make it to 15 years or more. However,
not all of these businesses need to fail. With the right planning, funding and
flexibility, businesses have a better chance of succeeding.
We know the facts and we’ve seen the lists but you have
to be a detail freak to avoid being a failed business statistic.
Let’s suppose you have the right personality, you have proven
management and leadership qualities and on top of that you understand that cash
control is critical.
With all these important attributes in-place what can go
wrong?
Well, honest errors in decision-making can go wrong.
These errors have their origin in the following areas.
1. Not
investigating the market
2. Business
Plan Problems
3. Too
little financing
4. Bad
location, Internet Presence, Marketing
5. Rigidity
6. Expanding
too fast.
It is easy to keep this list in your mind but each item can
stretch into a very broad topic and leave everything very mushy in your mind..
It seems to me, you make the list work when you take a
narrower view of each item on the list, at least initially, and then dig very,
very deep into each one..
The list doesn’t attempt to explain what you can do to
avoid the pitfalls of each. You have to do challenge yourself to ask all the
questions and promise yourself to answer all the questions fully.
You often need a trusted mentor or advisor to help you
with this part. Not to tell you want the answer is, but to help you formulate
the questions and then sign-off on the completeness of the information you need
to collect. This will form the basis of your decision-making.
Asking the penetrating questions and not stopping until
you have gotten all the facts that counts.
For example, when a business fails you can go back and
ascribe broad causes from the list above. For sure you will see the cracks in
the foundations of the business were clear well before the business succumbed.
Take “too little financing”. When the business finally closes,
of cause there was “too little financing” to keep the doors open. However, was
the demise set in motion much, much earlier when a plan to commit funds to an investment
hadn’t been thought through well enough and the business could not afford to have
lost that money when the project partially or completely failed. Well
the unfortunate decision to proceed resulted from insufficient depth of study. The company was weakened by not going into
sufficient detail in a combination of areas
incluing “not investigating the market”,
“business plan problems “and probably “too little financing”.
It’s asking the right questions at a detailed enough
level that really counts, exhaustively collecting information and then completing
the decision-making work implied in each item on the list.
We know how much your business means to you, your family
and the employees, vendors and customers that relay on you.
It is our passionate mission to have your small business
survive and prosper and not be an early statistic to failure.
We have a wide range of tools including decision-making
processes that will keep your company healthy and alive.
Contact us for a free consultation.
