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

Women and Small Business

In the book Women and Small Business author gives all the guidelines and tools need... Read More

How Small Business And Nonprofits Can Afford Multimedia For The Web

Multimedia is everywhere on the Internet, whether in the form of floating ads at major... Read More

Expanding your business.

Are you a small business owner who wants to expand your business? Do you need... Read More

Self-Employment: Do you know the Difference between Rates and Wages

The difference between rates and wages is not always clear to newly self-employed people and... Read More

Your Babys Ugly..and Youve Got Bad Breath

I've got good news and bad news. The good news is that 98% of businesses... Read More

How to Achieve Real Success in Business: Five Breezy Tips

Achieving real success should be the goal of any good businessman. But what is real... Read More

Be Nice to Your Payroll Department

Ok, so next to the taxman, your company payroll department might well be the most... Read More

Take a Break - Have a Pity Party

Pity parties are nothing new. In fact, we do it all the time and I'm... Read More

Franchising Pros and Cons

Last week's question from Anthony R. on how to choose the franchise that would best... Read More

Justice In Action

During the 1980 presidential campaign, candidate Ronald Reagan vowed, if elected, to appoint the first... Read More

A Day in the Life of a Self Employed Professional

It's Monday morning and Connie the Consultant sits in her executive office chair overseeing her... Read More

The Truth About Government Grants for Your Business

Free money! Receive up to $25,000 that never has to be paid back -- Guaranteed!... Read More

Technology Community Helps SMBs Focus on Their Core Business

If you're starting your own business or currently work for a start-up, you wear a... Read More

Mobile Car Washes and Shoe Policies

Mobile carwashing is hard work, it is tough on the your body and it pays... Read More

Small Business Server Business Tips

Top 3 Ways to Maximize Your Small Business Server Consulting ProfitsOver the past 7 years,... Read More

FTC Adding to the Franchise Rule

Last summer the FTC put forth a report and then asked for comments on modifications... Read More

Are You Satisfied With Your Business Just As It Is?

Did you know that satisfaction is the number one emotion people want to experience about... Read More

Share Ad Expenses to Boost Profits

The challenges of the small business owner are well documented. They must battle for market... Read More

Slip And Fall Professionals; Service Businesses

Since you own a business you probably have liability insurance to help you against a... Read More

Asphalt Paving: Striping Your Parking Lot

As you may already know, asphalt paved parking lots do need maintenance from time to... Read More

The Hidden Treasure in Your Business

I started working with another new client last week. He has been in business for... Read More

Definition of Security: Small Business Owner

Yes, that IS security when nobody can downsize you because you OWN that small business... Read More

Looking for a Business to Run in the New Revitalized Downtown Area?

Looking for a place to add a Quick Lube away from your Super Wal-Mart Competitor?... Read More

Business Valuation is Critical

What is Business Valuation? The term business valuation is the method by which the business... Read More

Franchising 101- What You Absolutely Need to Know

Franchising has made the world look really small. The well known flavors are now not... Read More

When and Why YOU Are the Best Writer for Your Business Plan

WHEN you are operating or planning a small business that is seeking funding for less... Read More

Small Business and Over Regulation

Over regulation of small business is so intense it is getting hard to make a... Read More

Public Relations: Antidote for Small Business Failure

When small businesses fail, the wreckage is often assigned to undercapitalization, among other mistakes. Seldom... Read More

7 Advantages to Incorporating

There's no question that hard work and a little luck is what it takes to... Read More

Common Mistakes When Planning Your Medical Spa

Everything starts with a business plan: If you don't have one. Write it. A good... Read More

Procrastinate Your Way To A Successful Small Business

What will your business look like a year from today?If you're like most small business... Read More

Success Tips for Small Business Owners

Running a small business requires many skills. However, to do this successfully you need to... Read More

How to Profile a Client

At first glance, this topic may seem a little repetitive, but you will find that... Read More

Modern Clear Coats, Auto Detailers and visit to Lexus of North America

We visited Lexus USA, home of the Lexus North America Head Quarters to help us... Read More

Boston Market; Mobile Auto Detailing

Boston itself covers 50 square miles of concrete and traffic, well city limits actually exactly... Read More

Direct Mail - For Small Businesses

We hear a lot of talk about junk mail nowadays. Many people will tell you... Read More

WARNING to Home Based and Small Business Who Want to Buy Television Cable Advertising

Most small businesses will not even try to advertise on television. It's too expensive and... Read More

Franchise Rule to be Revised; Why?

The FTC, Federal Trade Commission, is considering modifying the franchise rule. So far it has... Read More

Who Makes the BEST Alliance

What types of companies do you want to align yourself with?What is the best company... Read More

Build Credibility, Value, and Trust on a Shoestring

Setting priorities in your business? Your first job is to sell. Selling is - writing... Read More

From Birth to Death

Your product is dying. With the same inevitability that we humans move ever closer to... Read More

Buying a Business

Start thinking about buying an established business if you want to avoid the immense risks... Read More

Are You Making the Most of Your Intern?

KEEPING INTEREST HIGH: Supervision is key to the success of the program. Interns like direction,... Read More

Business Debt Collection Letter Writing Secrets

Debt collection letters--an overview"Debt collection letter" in the singular may be an oxymoron, since unfortunately,... Read More

Effective Customer Interviews Make Life Much Easier!

One of the critical success factors for service-related businesses is our ability to understand a... Read More

Going Public: Now that You Have Successfully Made the Transition, What Do You Do?

Ok, you have successfully accomplished your dream of being the CEO of a public company.... Read More

Making Your Purpose Your Business Step #2- Getting From Point A to Point B

In my previous article, Step 1, your challenge for the month was to research where... Read More

Entrepreneur to Employer

You make the decision to go into business and for some time work from home... Read More

Do I Have to Do EVERYTHING Myself?!

The air in my client's office nearly crackled with her irritation. A scheduling snafu had... Read More

Small Business - A Thing Worth Doing Is Worth Doing Badly

A thing worth doing is worth doing badly. Yes I know that it should be... Read More