Why Businesses Fail
Fear and lack of discipline are the most common reasons businesses fail. Running a business is like life. We all fail everyday so it's best to fail early, fail often, and fail up to a successful business.
Here are some failure points:
- No planning or strategy: Make sure you have a solid business plan in place to ensure you are prepared for your success as well as your challenges. A plan is the only way that you will know which way the wind is blowing. You want this written down and updated as things change.
- Inability to learn from your mistakes: No business is perfect. Successful businesses learn from their failures and make changes to guide them as they encounter obstacles.
- Losing your focus: Spend your time on the big picture, and set your employees up for success with the right tools like automation, clear goals, integrated software that keeps them organized and productive, and then let them do their job.
- Putting your hand in the cookie jar is a big No no! Use business money for the business: Eventually your company will slow down, and you’ll need money available to operate through the tough times.
- Over-expansion: Success at one location doesn’t guarantee success somewhere else. Be wary of new costs, slow revenue growth, and other distractions from managing your time efficiently.
- Bad locations: Remember to fail fast and stop the bleeding. A bad store will cost you a fortune if you don’t watch out. Make sure your stores are easily accessible to customers, in a thriving neighborhood, visually appealing, and convenient for you to get to.
- Lack of capital and/or profit: Have a solid business plan, hire good employees, save money, and invest in both software and hardware automation to ensure that costs stay down and profits stay up.
- No succession plan: Not knowing who is going to take over when you retire or get sick can be disastrous. Only 30% of businesses survive this transition, so make sure that you have a real plan B. A real manager or partner is critical to your peace of mind.
Be sensitive to stress. The day to day demands can lead to a cycle of stress and feeling constantly overwhelmed, which is a recipe for burnout and illness.
The solutions are simple but run against the bull in a china shop mentality of most entrepreneurs.
The definition of bull in a china shop: “A person who breaks things or who often makes mistakes or causes damage in situations that require careful thinking or behavior.”
Step 1: Work less:
- Work less hours: Hire good trustworthy people and let them do their jobs.
- Stop expecting perfection: You’re going to make mistakes and your staff are going to make mistakes, and that’s okay. Take risks and learn from your mistakes, don’t drive like an old person from the front and don’t be overly cautious, perfection doesn’t exist.
- Say “yes less”: Don’t overextend your business by approving every request that you get from employees and customers. Don’t be afraid to say no once and awhile.
- Check your phone less: Create room for focus. By checking your email and phone twice a day this will allow you to focus on the business.
Step 2: Keep you eyes on the prize:
- Set deadlines: If you don’t set deadlines, nothing will get done. Be accountable and make your employees accountable.
- Focus on impacting the bottom line: Look for new technologies that can help streamline your business and improve your customer experience.
- Grow or die: Make sure you are acquiring new customers, not just replacing the lost ones.
- Automate all recurring jobs: Look for integrated software solutions that leverage your effort and reduce labor such as marketing, payments, communications, logistics (pickup and delivery), assembly and accounting. These tools will streamline your business, saving you time and money.
- Cut payroll: Easier said than done but consider installing kiosks and lockers that allow customers to drop off/pick up their clothes 24/7 without the staff.
Step 3: Focus
Slow down, think about your goals, and how you achieve them.
Step 4: Create a list:
Here are a few examples:
- To-do lists
- Marketing ideas
- New products
- Job openings
Write them down and then get them done.
Step 5: Repeat your successes
Here are some examples:
- Know your best customers: what they like, where they live, and what other products that they might buy.
- Understand the service level and preferences they desire.
- Know (if possible) where they work.
- Where they live, do they have a family, a dog, etc.
- If they are open to referring you to their coworkers and friends.
Step 6: Delegate
Enjoy your life by delegating responsibilities to your employees. Start with the easy stuff like pickup and delivery and ordering supplies.
No one is good at everything so get help with things like marketing, bookkeeping, and communications. This will allow you to focus on the tasks that impact your bottom line, free up your time, and grow your business.
Don’t let fear control your actions. Be positive and take care of yourself.