Why Small Businesses Fail

We've all seen it happen and maybe even experienced it ourselves; the business opens and as quickly as it opens, it closes. While many speculate as to how such a thing can happen, particularly when the business offered a product or service everyone seemed to want and/or need, the fact remains - the business didn't make it.

Having been a Business Development Coach and a Marketing Strategist for roughly 35 years - longer than I've been a life coach (21 years) I need only to listen to the wounded individual as he or she struggles to find a someone or a something on which to place the blame. The sad but true fact is that when a small business fails, the first place I look is at the owner. That's not to say the owner is a failure. On the contrary! What it usually indicates is that the person that started the failed business was, and is, too wrapped up in the concept and didn't pay sufficient attention to planning. If you haven't read my article entitled Planning Backwards, I suggest you do so. Enter your name and email in the form below and I'll send you a copy.

 

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The difficult part for me as a coach is to help these business owners get things turned around without completely demoralizing them. Face it, we don't know what we don't know and unless what we do begins with a well-thought-out plan, success is not likely. The good news is that anything can be turned around and put on the winning track as soon as a workable plan is devised and implemented.

This is the point at which a business coach is of great value to the business owner. If you're a sports fan you're surely aware that no matter how great a player is, the coach standing on the sidelines can observe things the player cannot. Being dedicated to the win but not actually in the game places the coach in a position to see and be aware of a multitude of things the players cannot see and are not aware of. It's a case of not being able to see the forest for the trees... sorta!

In addition to coaching individuals and businesses, I also coach other coaches to give them ideas and strategies to better serve their client's needs. As recently as this morning I received a call from a client who had taken on a business client and wanted ideas and help in promoting his new client. The promotion of this company is something the owners had struggled with for some time. Unable to come up with anything that really worked, they hired my client to promote their business for them. My client felt trapped in what his client told him they wanted done and how they expected to have it done. My client's client was so emphatic as to how they wanted their company promoted that they had essentially tied the hands of the person they were paying to help them. This was clearly a case of my client's client wanting to continue the plan that wasn't working and expecting to get a different result. In case you are not aware, it is foolishness to keep doing the same thing and expect a different result. That's just not gong to happen - ever!

In the case described above I convinced my client that he would loose the account if he couldn't turn around the financial picture. He had nothing to lose by introducing the new and innovative concept I recommended. Hesitantly, he did make the recommendation and the company was thrilled with the concept. The end result was that their bottom line increased considerably and my client is now their hero. Having given them a concept that worked, it will be easier for them to accept any new and innovative ideas he may offer in the future.

So, in this case, it wasn't the business that wouldn't work but, rather the owners who, for whatever reasons, were tied to an unrealistic idea of what it would take to make their business begin to take off. This was a clear case of a would-be owner seeing someone else's business grow rapidly with a particular approach and assuming that they, too, could make their own business grow rapidly with that same plan. That, however, was not going to happen.

What works well for one type of business will not necessarily work well for all businesses. Each person who plans to start a business needs to know everything there is to know about their potential customers and/or clients. In the case of business strategies - one size does NOT fit all.

When the owner of any business, whether it's one of the corporate giants or a smaller, single-owner or family owned company, the strategy is the same - be able to step back far enough to look dispassionately at the big picture or hire someone who can do that for you. If you're using the right strategist, that will not only get and keep you out of the red-ink column but will allow your business to thrive.