|Strategic Planning Information|
The Chief Cause of Business Failure & Success
Business rises and falls on leadership. According to business guru, Brian Tracy, "Leadership is the most important single factor in determining business success or failure in our competitive, turbulent, fast-moving economy." Still not convinced? Based on a study by Jessie Hagen of the US Bank, here are the main reasons why businesses fail:
? Poor Business Planning
Proper application of these key factors is a function of good leadership. Let's look at some of the conclusions of the US Bank report. According to Hagen's study, in the Business Planning category, 78% of businesses fail due to lack of a well-developed business plan. It boggles my mind that so many people go into business without a plan, as if it were the ice cream flavor-of-the-month! Is it any wonder that when I came across the DEA Police & Government auction site of confiscated property, there is a gleeful statement that declares, "Most businesses fail within their first two years, so chances are, you will come across some relatively new merchandise. At (our) auction, get what you need without paying full price."
If you just rolled out of bed with 'a great business idea' and don't want to be a part of this grim statistic, run to your nearest bank, get a free business plan template, and write your plan now! Honor the time-proven cliché, "If you fail to plan, you plan to fail." Leadership is about planning for success before it happens. Sun Tzu, the 6th century Chinese philosopher, in his epic work The Art of War, gave some sound business advice that still applies today: "When your strategy is deep and far-reaching, then what you gain by your calculations is much, so you can win before you even fight. When your strategic thinking is shallow and near-sighted, then what you gain by your calculations is little, so you lose before you do battle."
In the Financial Planning category, a whopping 82% of businesses failed due to poor cash flow management skills followed closely by starting out with too little money. Business leadership is about taking financial responsibility, conducting sound financial planning and research, and understanding the unique financial dynamics of one's business. Before even starting a business, show your plan to your accountant and get their counsel. What a concept! Asking for the advice of someone who sees the bottom-line realities of business day in and day out; someone who sees the birth certificates, successions, and autopsy reports of thousands of business entities. It just makes good business sense. But many people will ignore this advice and eventually meet with business disaster. [Word of caution: don't rely on just one opinion. Get at least two or three opinions from different accountants to get a more informed view].
The third business failure factor profiled in the report, and a critical one, was Marketing. Over 64% of the businesses surveyed in the Marketing category failed because of owners minimizing the importance of properly promoting their business followed by ignoring their competition. Again, as a business leader, you must be able to effectively communicate your idea to the right people and understand their unique needs and wants. Leadership is all about taking initiative, taking action, getting things done, and making decisions. If you're not doing anything of significance to market and promote your business, you are most likely headed for business failure. I recommend every time you get up in the morning, jot down 5 new things you can do to promote your business and go DO them! If you can't think of anything to jot down, I highly recommend reading Jay Conrad Levinson's book, Guerrilla Marketing, which has oodles of useful information and tips on promoting for small business.
Know your competition. Leadership is also about providing value to people. If your main competitors are all providing a better quality and lower priced product than yours, how can you possibly create any value? Either you harness your strengths to provide different benefits such as speed, convenience, better service; lower your price and improve quality; create a different product for an unmet demand; or get out of the game.
Finally, one of the most important reasons why businesses fail is due to poor management. In the Management category, 70% of businesses failed due to owners not recognizing what they don't do well and not seeking help, followed by insufficient relevant business experience. Not delegating properly and hiring the wrong people were major contributing factors to business failure in the Management category.
Leadership is about knowing yourself ? understanding your strengths and weaknesses. Leaders are aware of their potential. Losers ignore their potential. Leadership is ultimately about influence and delegation. As a leader, you must have the humility to be able to surround yourself with people who are brighter than you and who can make up for your weaknesses and limitations so you can do what you do best: seize the day and lead! ■
Sharif Khan is a professional speaker and author of "Psychology of the Hero Soul," an inspirational book on awakening the Hero within and developing people's leadership potential. You can reach him at email@example.com or by visiting http://www.herosoul.com
Sharif provides inspirational keynotes and leadership development workshops that entertain, educate, and empower. To book Sharif as a speaker for your next event call: (416) 417-1259.
SWOT Analysis Is No Magic 8 Ball
Q: A key investor in my business has suggested that I hire a consultant to do a SWOT Analysis to help plan for the future. I try not to argue with my investors, but I'm not so sure I need to have this done. What do you think? -- Laurie B.
Take A Systems View To Ensure Your Business Stays Healthy
How are you feeling today? Good, not so good, great? Let me ask the same question in a different way: How is your gastro-intestinal system functioning today? What about your lymphatic system? How's the old circulatory system flowing along? Are all your bodily systems aligned, in sync, and cranking at peak performance?
Home Improvement Construction Project Planning
The first task before hiring a contractor for home remodeling is laying out the details on what exactly you want done. This will ultimately save you time and money, as you will be able to choose the perfect contractor for your construction job, and get the job done correctly the first time. Personally, I have always found that writing out every detail initially will help you think of the task more clearly in your mind. This will also aid in your description of the job to the contractor, and will allow for a better estimate of time and cost, which are coincidentally the two most important things to consumers.
Is Plan B Ready?
Business owners and entrepreneurs are, by nature, risk takers and adventurers. If we didn't have that "optimism gene" floating around, not much of any progress would ever get done. But every so often the adventurous get in trouble.
Fail to plan... or Plan to FAIL??
Running a business, whether it be an offline multi-billion dollar company or an online part time home business, they share many similar traits.
Dayton, OH; Why your Company needs to expand there
In Ohio: besides the 3-Cs you should look at Akron, Dayton, Canton, Toledo, Youngstown and their suburbs. We have been serious studying these areas quite intensely for quite a while, here is what we found; Dayton OH, is looking up after the recent GM Plant received high ratings for productivity being able to beat the Domestic Averages for time to build cars and SUVs, it's SUV Plant was amongst the top performers in the Country for time to build at an average of 20.7 Hours, much better than the Ford Plants all expect F-150 and Taurus Models. Many new projects are happening in Dayton;
Memo: Sustaining Growth in Your Business
What gets measured gets done.
Menu Driven Business Planning
A menu is the foundation of any restaurant; Guests will support or avoid a restaurant for its food. Starting with a preliminary menu is a simple and basic approach to restaurant development. Begin with a menu, and you are light years ahead in the restaurant development process. A menu will tell you and your Guest what you are trying to be as a business, and greatly enhance your chances for success.
Completing the Annual Planning Process
Imagine an office without a desk, or lights, a computer, or even something as simple as a chair. When the architects and designers started planning a building or office space they knew they would have to make concessions for these items during each of the building activities. As marketers, we take part in many activities, much like a builder or designer does.
Corporate Contingency Planning
If you've ever listened to Warren Buffett talk about investing, you've heard him mention the idea of a company's moat. The moat is a simple way of describing a company's competitive advantage. A strong competitive advantage, or a wide moat, gives a company sustainability, which, as investors, we're highly interested in.
Six Key Areas For Evaluating A Strategic Alliance
Strategic alliances are increasing at a rapid rate. It is good for business, good for the consumer. A strategic alliance is similar to a joint venture. Everyone remains in his or her own entity, yet come together for a single purpose or period of time to create something that could not otherwise be created.
Abstract thought on Business Strategy and Nature
Here is an abstract thought on studying nature and the natural order of things; things which work to help you better understand and strategize in business, war, sports or military operations. Let's compare the methods of distribution of organic viruses to all other more obvious distribution methods.
Balanced Scorecard Strategy Map
With the help of balanced scorecard strategy map, it is very easy to design the organization goals and build business strategies. Balance scorecard and strategy map are interrelated with each other. Strategies map is the foundation to design business strategies or perspective. Using strategy map, you can design the strategies and using balanced scorecards you can build business models.
How To Get More Business During The Winter Months
Business seems to drop, slow or even stop during the winter months. As tourist traffic slows or stops during the winter months so does the incomes of many local business owners. The first step in overcoming this problem begins in your brain (don't they all?)
Nine Succession Planning Mistakes Small Businesses Should Avoid
1. Attempt Succession Planning Without Other Strategic Plans. Succession plans define a company's business heirs, but what will they inherit? They will inherit a company with no vision, no strategy to deal with the competition, and no plans for changing the way it does business, if the current owners spend too little time planning for the future. Every firm should have strategic plans to increase its market value.
Why Create an Annual Plan?
Can you imagine going on a road trip without knowing your destination? Or, building your house without plans? The same can be said about running your business without a plan.
How Copying the HBO Schedule Can Boost Your Business
I'm not talking about posting the HBO schedule on your website or sending a Xeroxed copy around to all your customers. When HBO came onto the scene they were innovative, fresh, and willing to do things other people were not.
Executive Summary for Business Plans of Franchisees
Writing a business plan for a franchised outlet of a larger company to get funding or find investors is difficult because the franchisor already has a plan which is working, but until you are privy to it upon purchase you actually know relatively few details. The franchisor must keep this information proprietary to insure competitors do not steal the information, but the franchise buyer needs the information to prepare a business plan to get a loan from a bank. Thus a catch 22 exists and is further exacerbated by the fact there are laws against some types of disclosures, which many franchisors due to the litigious nature of franchising do not wish to disclose based on advice from their attorneys. So what do you do? Well, you do the best you can using the UFOC, uniform franchise offering circular or ask the franchisor to send in a business plan directly to your banker who, signs a waiver of non-disclosure and you cannot see it until purchase.
A Unique Joint Venture Twist: Make Huge Profits Even If You Have No Money, No Products, and No List
Would you like to jumpstart your online or offline business without spending a ton of money?
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