3 Ways To Make Certain Your Business Fails

Most small businesses incorporated in 2005 will fail by the year 2007. No matter the industry or the economic times in which the company was initially conceived, the fact remains that businesses fail on a daily basis due to general lack of knowledge and know-how. What follows are my opinion on three very common methods to ensure not only mediocrity but failure as a business entity in today's world.

1. Lack of vision and focus

Most business, like most people today, lack a clear vision for their company (and products). I can count on one hand the number of my clients who have been able to answer the initial question of "What are your goals?" without stuttering or pausing in confusion. Strategy formulation (or business planning, if you will) begins from the top-down, starting with a company mission, and ending with a specific plan towards mission completion and execution. Some common flaws the indicate lack of vision and focus include:

-a vague and passionless mission statement, such as "Our company is committed to building a better world", or, even better, "Our company strives to be the company of choice for our consumers". Vague statements serve only to dilute collective energies within your company.

-a mission statement and business plan that is articulated by all and lived by none. Too many companies believe that having a vague, multi-colored business mission statement on the walls (for all to see) qualifies as strategic planning. Employees may walk by this "mission statement" on a daily basis, as would zombies warmed-over, setting about doing whatever it is they do to execute this vague and passionless "mission statement".

The solution to this problem is simple: You must first start with an idea, a plan on how you want your company to exist in the future. The idea can be as large and grandiose as you like, however, you must then designate a purpose behind the ultimate company goal. Purpose is the fuel that enables the company to move forward in times of difficulty. Once you have a purpose, you must then clearly communicate this ideal to every single employee you have AND you must make certain that you leave no room for misinterpretation of this ideal. This serves the purpose of creating a collective group focus, whereby an entire company is centered around a single abiding ideal or principle, and is committed to the attainment of this ideal. That's power. That's focus.

2. Lack of cash flow

Businesses are made or broken by a simple statistic: net cash flow received. Simple company dynamics dictate that the greater the net company cash-flow, the more solvent and independent the company. Companies that rely consistently on credit lines, for whatever reason, are susceptible to economic downturns. They will be the first companies to fail. Just as many real estate investors have learned, capital liquidity equals success or failure. Therefore, to ensure the life of your company, you must learn to master some simple rules:

-produce multiple, varied products (services, tangible products, etc) -economize expenses as best possible (every dollar spent on advertising should produce two dollars in income, as a rule of thumb) -maximize monthly income (rather than settling for inconsistent, feast-or-famine events)

These are simple rules, however, many companies fail to follow them. They aren't glamorous, and they certainly aren't rocket science. Perhaps that is why are NOT followed. Most people are enamored with technology and gadgetry, bells and whistles, intricate and elaborate business plans. They focus on how cool their advertisements look rather than how much income results from them. They allow themselves to fall in love with the idea that you must spend money to make money (when they should realize instead that you must spend money appropriately to make money). Keep it simple, and follow through.

3. People problems

One of the easiest ways to judge the potential success of a company is to visit with some of its employees. Front desk staff, customer service reps, managers, or even officers. If you enjoy your interactions, and feel valued, then that is a sure sign that the company is on the right track to success. After all, a company is only as good as its' people. And most companies are certainly adequate at hiring mediocre, unhappy, or problematic employees. In fact, most companies put more thought into their cafeteria lunch choices than they do their employee selection.

What follows are some tips to improve your bottom line in this area:

-Put more thought into hiring and firing. At the risk of sounding simplistic, your company needs to be in the business of finding knowledgeable, friendly, driven, and team-oriented people. If your current employees don't fit the bill (with regards to company mission) then you need to allow them to seek employment elsewhere.

(As an aside, years of employment with the company should not be the primary criteria for advancement (though many companies seem to think so). Look at it this way: Some people are great at being mediocre (with regards to the above criteria), and do it consistently, year in and year out. Don't reward complacency, and don't promote based on years worked alone. That's ludicrous!).

-Place your best people in areas of high-customer contact. For example, your receptionist or customer service representative should be your ideal company representative, as he or she will have the most contact with potential consumers, and thus, the most potential impact on buying habits. Potential customers that feel valued at first sight tend to stick around and shop.

-Always provide for communication of employee roles. People need to know what their specific role is (and duties, oddly enough) within a company. If they don't, they can't fulfill these roles or duties. Productivity wanes, your company suffers, and so on.

Copyright (2003) Leif H. Smith, Psy.D. All rights reserved.

Performance expert Leif H. Smith, Psy.D, is the president of Personal Best Consulting, a consulting firm located in Hilliard, Ohio. To learn more tips and techniques to immediately improve performance in your life and to sign up for his FREE monthly advice newsletter, visit http://www.personalbestconsulting.com

---

Do Your Best; Hire the Rest

One of the hidden perks of raising six children is... Read More

Successful Small Businesses Use PR

It's obvious when a small business has accepted the fact... Read More

A Key to Success: Be Consistent

Over the years I heard the best way to learn... Read More

The Responsibility Conundrum - Where art Thou?

Mr/Ms, 'not me' is often on holidays in your business.... Read More

Mobile Carwash; Senior Citizens and Mobile Homes

Senior citizens are generally not a large marketing segment for... Read More

Your Babys Ugly..and Youve Got Bad Breath

I've got good news and bad news. The good news... Read More

7 Reasons To Take Control Of Your Small Business? Checking Needs

Business checks are available in many styles and varieties. They... Read More

Building Your Business for Success in 2005

It's a strange anomaly.Most people who set out to start... Read More

Postcard Marketing ? Low Cost Visibility

You need to be visible to attract customers, right? But... Read More

Yeah, It IS Lonely At the Top

Sometimes when you run a business you feel as lonely... Read More

Starting a Business in New Hampshire

Hew Hampshire car wash market. Well we have visited every... Read More

Wichita KS; Anything is Possible in Wichita Business

Just when the entire state was kissing Wichita goodbye, economically... Read More

Retail Customer Opportunities for Pressure Washing Companies

Pressure washing companies must look for customers in the retail... Read More

Small Business Newsletter Dilemma: Which Day Do I Send?

If you're just ramping up your small business email newsletter,... Read More

How To Make Sure Your Customers Still Trust Your Small Business

The stock market is still on a wild roller coaster... Read More

Small Business Planning -- Three Myths

Are you -- like 70 percent of small business owners... Read More

Window Cleaning Business Start Up

Should you buy a business opportunity or Franchise if you... Read More

Small Business Opportunities And The Tens

You may find this Newsletter a little long winded but... Read More

How To Start A Blind Cleaning Business Quickly And Easily

Starting the blind cleaning business is one of the best... Read More

Obtain Maximum Results For Your Small Business Through Better Time Management

Most small business owners are faced with so many responsibilities... Read More

Top 7 Small Business Tax Tips

Here are seven ways for owners of small businesses to... Read More

How to Raise Your Fees and Thrill Your Customers

Think the best way to get more customers is to... Read More

Boat Detailers; Add-on Products and Services

As a Boat Detailing Specialist, you may want to offer... Read More

Postcards Make It Rain Referrals

One of the simplest ways to expand your marketing efforts... Read More

Small Business Success: Thriving During Change (And Landing On Your Feet!)

If I had $1.00 every time I heard someone say... Read More

But Weve Always Done It This Way

Sacred cows take a long time to die. We get... Read More

The Key To Success - Choose The Right Partners

Do you promote yourself as offering prompt, reliable and quality... Read More

Get Out Of The Rut And Back On the Track

Do you sometimes find yourself just going "through the motions"... Read More

11 Things Small Business Owners Can Learn From The Miracle On Ice

1. Know Where You're Going ? Coach Herb Brooks had... Read More

Top 7 Small Business Resources for 2005

If you want to start a business in 2005, and... Read More

Buying a Business

Start thinking about buying an established business if you want... Read More

Franchises: How to Find the Best Franchise Opportunity for You

If you are looking for a franchise opportunity, the choice... Read More

Image of Your Franchise Automotive Outlet is So Important

Image of your franchise automotive outlet is so important. Some... Read More