Saturday, 2 October 2010

Why businesses fail And what you can do about it!

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Have you unintentionally set your business up for failure?

No one sets out to fail! Most business owners read all the

statistics (maybe more than once) before they open their

doors. Many know the reasons why businesses fail. But some

businesses operate under this paradigm: "failure can never

happen to me because I know better." Is that you?

What most business owners miss is looking at the reasons for

business failure and turning them into action steps to help

overcome the odds of failure. How do I know? I once thought

I knew better, too!

Bear in mind that even "adolescent" businesses fail.

According to the SBA statistics, 90% of small businesses

fail within the first five years. Many businesses aren't

producing 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 wise

about 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 10

years) provided me with a business plan to review. Not one!

Two of 100 clients have had marketing plans, but marketing

plans don't work without a business plan and other focus

type tools, too. The other common (95%!) mistake I see (and

help my clients correct) is pricing their services very low

as a way to gain market share and new clients. So low, in

fact, that a potential buyer will perceive the service or

product as being cheap and of low quality, even when the

provider offers years of expertise. NO ONE wants to hire a

business that is cheap! Inexpensive - yes; affordable - yes;

cheap - no, no, no!

The most common problems business owners experience stem

from simple functions like streamlining, organizing,

information resourcing, marketing, planning, visioning,

languaging, communication, technology and ecommerce.

Example: If you know that most businesses fail because they

don't have a usable business plan, develop your own business

and marketing plans and use them daily; don't create one

that gathers dust on a shelf. I use the One Page Business

Plan Book or Interactive CD by Jim Horan. It helps business

owners create very realistic, focused, and well thought-out

business and marketing plans, including scorecards to help

you anticipate and avoid business problems.

Example 1: Recently, a client turned down an opportunity to

teach computer classes on a subject she could easily teach.

Using teaching to market her business is on her marketing

plan. So why not? Well, the proposed classes weren't going

to help her get business for her primary business, they

weren't going to attract her ideal client, and the pay was

much lower than her usual hourly rate. She felt confident

about declining the offer. Of course, that same week, other

new business - the type she really wanted - came her way!

Example 2: New client knows she wants to create a business

plan. She also has a strategy of increasing her income by

joining four organizations with networking opportunities for

her to meet her ideal clients. She joins the first two

groups - total cost: $400.

As she starts her business foundation work, which includes

the One Page Business Plan, she realizes that her ideal

client isn't whom she originally thought it was! Some

clients might be found in the two groups she's already

joined, but not her ideal clients. As a new business owner,

she wants to spend her time around her ideal clients, first

and foremost. Planning just a little more for her business

would have saved her $400 in membership fees.

What other simple things can you do to build a solid

business foundation?

· Use a one-page plan daily to create your to-do list and monitor your business.

· Create an Ideal Client Profile and Elevator Speech and define a niche for your business.

· Read one of the "E-myth Revisited" books by Michael Gerber.

· Go with your strengths. Hire individuals whose strengths ARE your weaknesses to "fill in the gaps."

· Remember that there is no need to repeat the SAME mistakes others have made.

· Know what your business exit strategy will be.

Most business owners don't know what they don't know. Get

assistance by hiring non-biased professionals who help you

realign with your vision, create plans and financial

scorecards to monitor your business. Look for someone who

can suggest resources to help you and your business grow.

Someone who's been in your shoes and succeeded. Start

looking at how having a partner - a business consultant,

coach, counselor, strategist, organizer or planner - can

help you grow your business.

Ready to learn more about business success? Take a look at

the articles I found on business failure that are posted

below, (http://www.coachmaria.com/articles/succeed.html).

Learn to overcome the costly (both in money and your time)

errors that other business owners have already made. Give

your business a fighting chance to continue to succeed.








? 2004 Maria Marsala, is a business builder who helps women-owned service businesses increase their bottom line in less time. A former Wall Street trader and manager, she used her business expertise to create 6 S.I.M.P.L.E. Business Steps, a program developed to help her clients succeed in less time. Learn more at http://www.ElevatingYourBusiness.com


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