Why do small businesses fail?

sorry we're closedAccording to a Dun & Bradstreet* study, ‘businesses with fewer than 20 employees have only a 37% chance of surviving four years (of business) and only a 9% chance of surviving 10 years.’ Restaurants have only a 20% chance of surviving two years. Of these failed businesses, 90% closed because the business was not successful, did not provide the level of income desired, or were too much work for their efforts. The failure rate for new businesses was 70% to 80% in the first year and only about half who survived the first year would remain in business the next five years.

I spend much of my life working with and listening to small business owners, and I am now certain the true reason so many businesses fail (cease to exist) before year four is because people go into business for the wrong reason.

When I make presentations to business groups and ask why they chose to start a business, the answers are always the same. I wonder if you identify with one or some of these reasons people give:

  • I thought I could run a business better than my boss.
  • I was tired of working for someone else.
  • I wanted to be in control of my destiny, choose my own hours, and go on holiday whenever I felt like it.
  • I am good at something or trained in a particular field and have built my business around my skill set.
  • I had a good idea and believed I could make a business out of it.
  • I don’t know; it just sort of happened.
  • I want to help people, I’m not in it for the money (this response is particularly true of health practitioners).

Do any of these answers resonate with you? Have you really given much thought to why you are in business or what you really want out of it? Or have you stumbled into business as a reaction to your own personal circumstances without a true sense of purpose driving you?

It’s important to ask yourself; because your reasons for being in business will determine the way you approach it, which, in turn, will influence the ultimate success you have.

There are only two reasons to go into business for yourself:  to make money and to make a difference.  My book Liber8 Your Business shows you how you can do both and build the business you really dreamed of.  I’m looking forward to sharing it with you soon.  In the meantime if you have any questions about your business  model feel free to email me laura@liber8me.com

Cheers
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*Dun & Bradstreet is a public company headquartered in Short Hills, New Jersey, USA that licenses information on businesses and corporations for use in credit decisions, business-to-business marketing and supply chain management. D & B maintains information on more than 205 million companies worldwide.

If you want to put your business under the spotlight – Laura’s next Acceler8me Programme, inspiration and support for passionate business owners, kicks off in August.  Click here for details

 

Freedom is knowing you’d keep doing what you are doing if you knew you were about to die

STEVE-JOBS1

I just watched this amazing speech from Steve Jobs when he knew he was going to die.  It moved me as I expect it will you.  Watch it by clicking link below then come back and tell me what you think.

http://youtu.be/a5SMyfbWYyE

Understanding freedom and how important it is to us as human beings is becoming an obsession of mine.  Freedom is the very essence of happiness.  Life is a gift, we don’t have long in the scheme of things.

So what is your answer to the late Mr Jobs’ question?

 

 

 

From the desk of Liber8me. Small business mentors and publisher of Liber8 Your Business:  The revolutionary business planning technique that will set every small business owner free.  Get your copy here http://liber8yourbusiness.com/

 

The ten traits of wealthy entrepreneurs. What are they and do you have them? Score yourself here

financial freedom imageOver the past two years I have interviewed over forty successful entrepreneurs.  My criteria for an interview subject is that they must have built and sold at least one successful business.  Many of them have been serial entrepreneurs – having created more than one business and learned many lessons along the way.

As I’ve talked to these people it has become apparent that they all share certain traits that ultimately lead to their success.  If you want to succeed at your business (of course you do), you could do worse than focus on developing the traits exhibited by the rich and free.  Work out which ones you have in abundance and work on the ones you don’t.

Take a look at the traits listed below and grade yourself on a score of 1 to 5, where 1 means ‘not at all’ and 5 means ‘totally got it nailed’, against each of the traits. Don’t feel you have to be close to a 5 score to be successful. This is a reality check to identify the areas you will need to work on as you grow your business.

10 Traits of wealthy entrepreneurs:

  1.  Vision. Rate the clarity of the vision you have for your business when it is complete and you’ve created financial freedom from it.

1                      2                      3                      4                      5

 

  1. Self-belief. Rate your confidence in your ability to build a business that will generate great wealth and freedom for you.

1                      2                      3                      4                      5

  

  1. Passion. Rate your passion for your business

1                      2                      3                      4                      5

 

  1. Being goal-orientated. Rate the clarity of the goals you have set for your business

1                      2                      3                      4                      5

 

  1. Planning. Rate your current plan for a business that will feed you wealth

1                      2                      3                      4                      5

 

  1. Being action-focussed. Rate your ability to take action as needed.

1                      2                      3                      4                      5

 

  1. Determination. How do you rate your determination to succeed?

1                      2                      3                      4                      5                     

 

  1. Willingness to fail. How would you rate your willingness to learn from failures?

1                      2                      3                      4                      5

 

  1. Being wealth positive. How would you rate your willingness to be very wealthy?

 1                      2                      3                      4                      5

 

  1. Giving back. Rate your desire to make a difference through your business

1                      2                      3                      4                      5

 

Review your scores for each of the 10 traits. In which areas do you already feel strong? Which areas do you need to work on?   And what plan can you put in place to lift your game in your weaker areas?

In my book, Liber8 Your Business, I go into more detail about these traits and show you how to develop your strength in the areas you need to.  To be notified of the book launch just click here http://liber8yourbusiness.com/

 

From the desk of Liber8me. Small business mentors and publisher of Liber8 Your Business: The revolutionary business planning technique that will set every business owner free.

Pre-register for a copy of Liber8 Your Business here: http://liber8yourbusiness.com/

Find out about working with Laura here: http://www.liber8me.com/one-on-one-mentoring-programme/

Business mentor tip # 87 – Why company culture is critical to the success of your business

company cultureI’m working with a number of small businesses at the moment.  All are committed to growth and as such are bringing on new staff members to ensure this growth can happen.  All have accepted that as owners they must let go of certain aspects of their business to allow them to focus on the really important stuff – business development, new business, structure, strategy, vision and… the word so many small business owners forget about… culture.

There’s one question I’m asking all my clients at the moment: what’s the culture you are inviting people to join?

What would be your answer if I asked you the same question?  Have you given it some serious thought?  You should do – because your culture is CRITICAL to the successful growth of your business.

What do I mean by culture?

Your culture is the world you bring people into; the world that will ultimately influence how they behave.  I assume that, as the business owner, you want a highly motivated, fully committed and productive team working alongside you.   As the leader of this team, your job is to ensure they know what is expected of them and to provide an environment in which they can thrive.

Your culture is made up of 4 key components:

  • Vision
  • Values
  • Rituals
  • Attitude/personality

Vision:  What is your business doing that means more than just making money?  What are you aiming for and how will this make a difference to your industry, community, country or the world?  People want to be part of something, they want to be inspired and feel they are contributing.  Your job as leader is to paint this picture for them.  Give them a vision they can believe in.

Values:  What do you really stand for, and how is this reflected in your business?  A company’s values usually stem from those of its founder.  Just think about Apple for a moment.  Steve Job’s personal vision was to ‘put a ding in the Universe’.  His pioneering spirit impacted directly on the values of his company. Now take a look at the Apple Values as outlined in the Apple employee handbook 1993: http://www.seanet.com/~jonpugh/applevalues.html

Who wouldn’t want to work for a company like this?  So what are your values and how can share them with your team?

Rituals:  These are the glue that binds your team together.  The things your company does regularly that people can always expect.  These include the regular meetings you have, the celebrations, the rewards and prizes your team might strive for.  At my advertising agency we met at 8.30am every Monday morning for Work In Progress.  The agency always supplied muffins.  On Fridays at 5pm we stopped to celebrate a team win for the week. The agency supplied drinks and nibbles.  On a team members birthday we organised a cake for morning break. Staff members were day off – to be taken in the month of their birthday.  When someone left there was always a gift and leaving drinks.  Every year we went off site for a planning day, with accommodation and a big dinner for all the team.  These things always happened, and the team knew they could rely on them.  Our rituals defined our team experience together.  What are your rituals?

Attitude/personality: What kind of company are you? And what attitude would you like to see from your team?  Think about these questions and how they apply to your business.  Are you a creative company, do you want your team to come to you with new ideas? Are you willing to hear those ideas?  Is your business a fun place to work?  Or is it very serious?  Does your company inspire people with the vision and life up to its values?

There is a Sicilian saying: “the fish rots from the head down”.  Which means, in the context of this article, that the leader sets the tone for the rest of the team.  If you are serious, hard working, focused and driven…you’ll probably create a culture around your own personality type.  If you are young, a bit crazy and full of mischief… this will probably reflect in the type of culture you create.  If you are stressed and worried all the time, this too will probably impact on the happiness of your team and find its way unwittingly into your culture.

With leadership comes great responsibility.  Creating a culture where people learn, grow, thrive and flourish.  This is as important as developing new products, or creating a clever marketing campaign.

Look after the culture.  The results will show you the value.

From the desk of Liber8me.  Business mentors and publisher of Liber8 Your Business.  Click here to be notified of launch date http://liber8yourbusiness.com/

Want to work with Laura? : http://www.liber8me.com/one-on-one-mentoring-programme/