Monday, November 17, 2008

Why businesses fail

Art Comments

This is something I can write about with some authority. I have seen many business over the years blow past me one way then back the other. As a mentor and coach I have had some success (one of my people has a business listed on BE 100 fasting growing businesses) and other failures – some quite dramatic. It is amazing that people claim to want success but insist on not changing to achieve it. That said here some of the reasons businesses fail.

· Deception – this is a major one that covers a lot of ground. Lying to your self about what you or your business are capable delivering in part due to a lack of self awareness. A cleaning company is not a construction company – you cannot be all things to all people but because instead of servicing the client the motivation is on money and exploitation the company losses focus and Boom.

· Procrastination – not acting in a timely manner and putting things off that should be done or resolved quickly

· Immaturity – children throw temper tantrums and allow their feelings and moods to dictate their actions. As a business owner you do not have that luxury – you and your company must be the epitome of professionalism.

· Small minded – sometimes some people are unable to grow and repeat the same patterns of behavior (unwilling to learn)

· Improper alignment – valuing the acquisition of money more than servicing their clients or helping their employees and/or believing the purpose of the business is to serve them or make them rich.

· Lack of Consistency – as boring as it may seem – predictability is important because a client and employee must be able to count on your word being your bond – they must be able to count on you without thought or question regarding will your business do what it promises

· Lack of Commitment – some people play at business, as some as things get difficult they quit or when they are required to grow or even let go and trust others they refuse – they were not all in.

· Entitlement – some how believing you or your business are due some special consideration by merit of birth or family or that someone owes you a living instead of understanding you must earn it by serving others

· Lack of common sense – ignoring the obvious – spending more than you make, rewarding negative behavior, obsessing on criticizing other people and businesses instead of focusing self improvement, failing to appreciate and add value to clients and employees (not treating them as investments), believing you are somehow superior, (lack of humility), etc.

There are more reason businesses fail however these are some of the main ones. I hope you noticed Money was not in this list – while capitalization is important it is actually rare that this is why a business fails – when we dig deeper we often find mismanagement causing a lack of good will and a loss of desire to help or work that that business and its owner(s) is the root issue.

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