Get Fit For Business
One of the most frustrating experiences as a business coach is to be called in to help failing businesses. I often wish I had been called in a year earlier.
A staggering 66% of micro businesses in Canada fail within 5 years. Here are some of the symptoms of upcoming failure:
- Stagnant or falling revenue;
- Dropping prices to “buy” sales;
- No short term game plan to get the business moving forward;
- Taking more cash out of the business than is coming in;
- No understanding of financial information;
- Feeling overwhelmed and afraid to make any decision in case it’s wrong.
Do any of those sound familiar? Luckily there is a lot that can be done if action is taken soon enough.
One of the most disturbing facts to come out of research into small business failures is that the economic climate has very little impact on the failure rates. Most failures are due to simple mismanagement.
The most common reason for a business to fail is that it runs out of cash. “That often is the result of insufficient planning and the lack of a business plan” a recent statistical analysis reported. It goes on to add: “concentrating on technical rather than strategic work; lack of vision, purpose or principles; poor financial planning and review; lack of market knowledge and over dependence on specific individuals in the business” as common reasons for failure.
A recent Australian bureau of statistics and analysis showed an amazing 65.4% of small businesses still operating after five years. That’s 10% more still in business than in Canada.
WHAT’S THE DIFFERENCE
Australia has one of the most forward thinking business communities when it comes to business coaching.
In South Australia the Department of Trade and Economic Development (DTED) subsidises a coaching programme for business owners to help them develop their management and business skills. Groups of owners meet with a coach on a regular basis too and also receive one-to-one coaching by phone or in person each month. Business owners MUST commit to attending all sessions and work with fellow group members. In return the government will subsidise up to 75% of the costs.
WHAT YOU CAN DO
Planning is so important for success. Not just long term strategic planning, but also really focusing on the next two to three months, on weekly objectives and daily to-do lists. These are the steps that keep a business moving forward and build momentum.
The difference between businesses that thrive and those that do not, is focus. Focus on the destination, be determined to succeed and focus on the details of each step.
THE 3 STEP GUIDE TO BUSINESS SUCCESS.
1. Know your destination
Use visioning and imagery to build a detailed picture of what your successful business will look like: how many employees; your organization structure; how many hours you work each week and even what your office looks like. Create as complete a picture as you can and put it in writing. Use this to create your business vision.
The difference between a world class athlete and a talented one comes down to the mental edge required to succeed. Business is no different. You have to persevere, overcome failures, use your strength of character and leadership qualities. You have to focus on your actions.
These are the nuts and bolts of your business. You must understand them, apply them and train others to do so as well: service quality, business processes, staff recruitment and training; knowing your margins; following budgets and really understanding your finances.
These are the unglamorous parts that often get ignored when businesses start to grow. Details create consistency, allow delegation, promote growth and free up your time to control your business rather than it controlling you.
INVEST IN SUCCESS
Unfortunately not every government is willing to support small businesses past year one so it is up to YOU to invest in your success.