Enterprise: When it comes to failure there is only the management to blame.
Byline: Richard Brennan
Here's a little quiz A quiz is a form of game or mind sport in which the players (as individuals or in teams) attempt to answer questions correctly. Quizzes are also brief assessments used in education and similar fields to measure growth in knowledge, abilities, and/or skills. I like to play with business colleagues from time to time.
Doing my best John Humphreys John Humphreys may refer to:
wore the armor of Achilles against the Trojans to encourage the disheartened Greeks. [Gk. Lit.: Iliad]
Prisoner of Zenda, The and turning the spotlight firmly in their face I ask them simply: 'What causes most businesses to fail?'
External influences? Matters beyond our control?
Not really, the majority of small business failures are down to management control. It's important for people who make the jump and set up on their own to realise this early on. From now on you are master of your own destiny and success or failure will be down to you.
Well, that's your first and biggest mistake.
More business failure is caused by the inability of management than any other single reason -do not just rely on your own counsel but take advice wisely from advisers, staff, clients and suppliers.
Many of these people will have already done what you are attempting and have learnt the hard way.
The West Midlands West Midlands, former metropolitan county, central England. Created in the 1974 local government reorganization, the county embraced the Birmingham conurbation and comprised seven metropolitan districts: Walsall, Wolverhampton, Dudley, Sandwell, Birmingham, Solihull, has one of the country's highest business failure rates. Some one third of new businesses across the region will have failed within three years. But there are some proven steps you can take.
Never underestimate the importance of cash flow.
Manage your cash carefully, and remember you may be asked to pay up front before you can bill your customers.
Develop your own management competence. Assess your own skills through a SWOT analysis SWOT Analysis
A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. -be brutally honest and look to fill the gaps in your expertise.
Listen to customers and employees. We've all had bosses who did not listen. Treat your staff as you would wish to be treated yourself, while remaining close to your customers.
Delegate the tasks that others can do. Remember, if you are undertaking a task that someone else can do you are not doing a task only you can do.
Ensure you have a management information system that gives you the data you need. This includes cash flow, debtors, creditors, production/service efficiency, customer satisfaction.
Allocate time to planning. Make sure planning how and what you do becomes part of your routine. Systemise Verb 1. systemise - arrange according to a system or reduce to a system; "systematize our scientific knowledge"
systematise, systematize, systemize
order - bring order to or into; "Order these files" and document your processes. This will enable less skilled people to do the work and ensure consistency.
Differentiate your product. What makes you stand out? Why should people use you rather than others?
Control costs. Low inflation means people are not very accepting of price increases. Before you begin ensure you have completely costed your new product or service, and check your figures more than once.
Celebrate success. Show your staff you appreciate them. Also recognise your customers -they truly value you when you notice their loyalty or the size of their order. So don't despair! You can be one of the elite four per cent of businesses still surviving after ten years. After all, it's your specialist subject, so who better to plan for its success than you?
Richard D Brennan is the managing director of Strategic Alliance, specialising in helping business owners achieve sustainable success.