Beating the Odds on Business Failure

| Published by Mark Akerley under Newsletters |

Every year we see statistics reporting that about 50 percent of businesses fail in their first year and an even greater percentage fail within five years. Many reports also state the top reasons for this: insufficient capital, poor credit arrangements, bad location, competition, market turndowns, etc.

I’d like to suggest that these are not reasons for business failure, they are merely symptoms. The real reason why a business fails is because the business leader fails, plain and simple. Once we’ve come to terms with this “brutal truth” we can get at root causes: insufficient (or total lack of) execution, decisiveness, delivering on commitments and acceptance of reality. But as we start the New Year, let’s not dwell on the negative. Let’s turn these negatives into positives – call them “everyday leadership” for 2007 if you will – and make them guidelines for your success.

Execution. This is what it’s all about, getting things done. You must ensure that you’re not only getting things done right, but also doing the right things. The best way to make this happen is to have a plan. A good business plan consists of both a written document that clearly identifies top priorities and spells out the few vital goals and objectives the business must accomplish and a process that enables you to objectively determine the ever-changing status of the business. So if your plan is in your head, write it down. If it’s scribbled on a legal pad, organize it. If it’s crystal clear to you, make it crystal clear to everyone else (your key constituents), and engage them in its execution.

Decisiveness. With all the “noise” you must endure to get things done, progress and growth can be frustrating. Inertia will destroy a business in its tracks more so than a risky strategy, and you must say either “Yes” or “No” to get and keep things going. Perfection is not the objective, achieving results is.

As you begin 2007, take a closer look at those strategic, operational, financial and people issues that may be bothering you now, then gather the facts, complete your assessment, trust your gut and make the decision. Hoping for things to improve won’t make them better; taking action will.

Delivering on Commitments. The really important stuff in running a business concerns people. That includes your customers as well as your suppliers, partners, employees, business advisors, etc. You expect them to help you make your business successful, and you must make them accountable, but do you know what their expectations are of you? If you don’t, ask them. If you do, do you agree with them and are you meeting them? Are you following through on the promises you make? DWYSYWD, or “doing what you say you will do,” is the top characteristic of successful leadership, as defined by followers. Delivering on your commitments makes your customers want to do business with you and associates want to work with you. Make 2007 a winning year for your business, customers and associates by developing win-win relationships and fulfilling your commitments.

Accepting Reality. As a business leader, you are optimistic by nature. Considering business failure statistics, that’s a good trait. However, whether the glass is half full or half empty really doesn’t matter much. What does matter is that you understand the condition of the glass and what needs to be fixed, built or changed to alter that condition. Without luck, only objectivity can propel a business to greater success. So to become an obsessive realist in 2007, here’s what you need to do:

  • read and listen to signs in your business to really hear what results are telling you,
  • distinguish facts from opinions to ensure you have the right information for decision-making,
  • differentiate symptoms and causes to clarify what really needs to be addressed, and, maybe most importantly,
  • wear those rose colored glasses only for driving.

Everyday leadership isn’t easy. You need to be on top of your game and fully engaged in the business for these activities to work for you. However, it is simple; you don’t need an instruction book. Why not start today?


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