Why do most businesses fail to thrive?
Every business failure is the result of poor planning.
That may be hard to believe, but it’s true! Whenever a business has a big setback, or even when it outright fails, it is always possible to spot the bad assumptions, mistaken decisions, and lack of foresight that caused the problem. Having worked with many hundreds of businesses over the course of more than two decades, I cannot think of a single exception to this rule.
And that is great news! What it tells us is that if you assemble all the right information, carefully review your various options, and then make all the right decisions, then in theory your business cannot fail.Here are just a few of the areas where poor planning can trip you up:
- Buggy-whip makers. Imagine being the biggest manufacturer of the best buggy-whips… in 1908. The signs of the demise of your industry are all around you. So… what do you do about it?
- Economic fluctuations. It’s a hundred years later – it’s 2008 – and the country is entering a steep recession. How do you protect your business now and enable it to thrive in the downturn?
- Management issues. In the prime of life and at the peak of your success, you suffer a serious health setback. Who is going to run your business for you and help it thrive until you can get back to it?
- Supply shortages. Your extremely successful business depends on one source of supply for its raw materials, or on one source of demand for its products. But then unexpectedly your key supplier or customer is out of business. So… what now? And more to the point, how did you get in this bind?
- Overexpansion. You took the plunge and invested in equipment to make a promising new line of products, but then someone else came out with something better. How do you turn this lemon into lemonade?
- Employee lawsuit. He or she was never a very good employee anyway, but a sudden lawsuit for discrimination or sexual harassment or injury on the job puts the future of your business at risk. Could this have been prevented? And… what now?
- Succession planning. You reach the age of 55, and suddenly you realize that retirement is looming and this business and its real estate are your whole retirement plan. How can you make them liquid on your timetable? And what may be almost as important to you, how can you ensure that your beloved company will be able to continue without you?
- Most business owners are too busy working in their businesses to spend very much time working on them. That is why getting good advice is so important. If you have the right team of advisers in place, you should be able to get all your questions answered and develop just the right set of strategies to let you make the most of business ownership.
