How many times have you heard it? A business owner complains about the government, the weather, the this, the that, for the failure of their business.
When, in fact, for most businesses, the statistics you’re about to see tell a very different story. A story that’s important to understand so that you and your team know just how much your own actions ultimately affect the success or failure of your business in a much more significant way.
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32.1% Poor management of financial activities |
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14.6% Lack of management competence or experience |
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12.4% Inflation and economic conditions |
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12.3% Poor books and records |
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10.7% Sales marketing problems |
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9% Staffing problems |
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6.2% Union problems |
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2.7% Failure to use external advice |
It’s about 18.6%, isn’t it? Inflation and economic conditions at 12.4% and union problems at 6.2% are the only 2 factors outside the control of a business owners or managers. So outside influences account for only 18.6% of the reasons why small businesses fail.
You see, the statistics show that 81.4% of the small businesses surveyed failed because of issues under their control. So, 82% of the time when businesses fail, the owners really could have done something differently to stop that from happening. The problems were actually in their control. This is actually good news!
Fundamentally, it means if you’re having problems in an area of your business, you usually CAN do something about it. With the right help and possibly more involvement with your team, you’d normally be able to get each and every one of these factors in order.
These figures are even more surprising when you consider just how many business people blame the government, the this, and the that for the failure of their business or for tough times (at the same time, talking the economy even further down, by the way!), when, as you can see, the reality is completely different.
To take this one step further, consider this. Many people have actually made their fortunes during recessions or tough times, whereas others have failed just as easily in boom times! Why?
Precisely because of the factors mentioned here.
If more business owners had better control and management of the factors that create that 81.4% of the reasons why businesses fail, chances are their businesses would be booming regardless of economic conditions!
These results show that as much as government policies and economic conditions affect business, your actions and that of your team have a far greater effect on your results than absolutely anything else.
As such, it’s important to look out for these ‘hot spots’ and take action to resolve any of these issues—quickly.
If you would like to discuss a blueprint for business success contact Howard Graham
For more information, contact our Business Development Unit
