Have you unintentionally set your business up for failure?
No one sets out to fail! Most business owners read all thestatistics (maybe more than once) before they open theirdoors. Many know the reasons why businesses fail. But somebusinesses operate under this paradigm: “failure can neverhappen to me because I know better.” Is that you?
What most business owners miss is looking at the reasons forbusiness failure and turning them into action steps to helpovercome the odds of failure. How do I know? I once thoughtI knew better, too!
Bear in mind that even “adolescent” businesses fail.According to the SBA statistics, 90% of small businessesfail within the first five years. Many businesses aren’tproducing 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 wiseabout 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 10years) provided me with a business plan to review. Not one!Two of 100 clients have had marketing plans, but marketingplans don’t work without a business plan and other focustype tools, too. The other common (95%!) mistake I see (andhelp my clients correct) is pricing their services very lowas a way to gain market share and new clients. So low, infact, that a potential buyer will perceive the service orproduct as being cheap and of low quality, even when theprovider offers years of expertise. NO ONE wants to hire abusiness that is cheap! Inexpensive – yes; affordable – yes;cheap – no, no, no!
The most common problems business owners experience stemfrom simple functions like streamlining, organizing,information resourcing, marketing, planning, visioning,languaging, communication, technology and ecommerce.Example: If you know that most businesses fail because theydon’t have a usable business plan, develop your own businessand marketing plans and use them daily; don’t create onethat gathers dust on a shelf. I use the One Page BusinessPlan Book or Interactive CD by Jim Horan. It helps businessowners create very realistic, focused, and well thought-outbusiness and marketing plans, including scorecards to helpyou anticipate and avoid business problems.
Example 1: Recently, a client turned down an opportunity toteach computer classes on a subject she could easily teach.Using teaching to market her business is on her marketingplan. So why not? Well, the proposed classes weren’t goingto help her get business for her primary business, theyweren’t going to attract her ideal client, and the pay wasmuch lower than her usual hourly rate. She felt confidentabout declining the offer. Of course, that same week, othernew business – the type she really wanted – came her way!
Example 2: New client knows she wants to create a businessplan. She also has a strategy of increasing her income byjoining four organizations with networking opportunities forher to meet her ideal clients. She joins the first twogroups – total cost: $400.
As she starts her business foundation work, which includesthe One Page Business Plan, she realizes that her idealclient isn’t whom she originally thought it was! Someclients might be found in the two groups she’s alreadyjoined, but not her ideal clients. As a new business owner,she wants to spend her time around her ideal clients, firstand foremost. Planning just a little more for her businesswould have saved her $400 in membership fees.
What other simple things can you do to build a solidbusiness foundation?
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