Success and Failure in Business
One of our passions at RLS Focused Solutions is to help businesses be successful and sustainable. Each business must define for itself what success means. It may be just to make a good living or it might be to grow and prosper. Our definition of sustainability is that it will be prosperous, not just at a point in time, but well into the future. We are one of approximately 600 worldwide members of Resource Associates Corporation who has reported the results of work done to determine the difference between successful and unsuccessful business people. Let us consider their findings.
Common Traits, Habits, and Skills Successful People Possess
- The ability to envision success
- The ability to lead and influence
- The ability to chart a course
- The ability to empower others
- The ability to solicit trust
- The ability to focus on priorities
- A continuous search for knowledge
Some Common Reasons Why Small Businesses Fail
- Lack of knowledge of the business they are in
- Lack of vision and purpose by owners
- Lack of financial planning and review
- Over dependence on specific individuals in the business
- Poor market segmentation and/or strategy
- Failure to establish and/or communicate company goals
- Completion and/or lack of market knowledge
- Inadequately capitalized, underfunded, or poor cash flow
- Absence of a process for continuous improvement
- Owners concentration on tactical issues, rather than strategic issues
The Business Challenge
In college I took a course entitled Business Economics. Our expectation upon the start of that course was that we would study supply and demand curves, cash flow analysis, and economic trends. Instead, the professor concentrated on Chapter 11 of the United States Bankruptcy Act. That act provides a mechanism by which a court appoints a trustee to administer a firm though a bankruptcy process leading to either a reorganization or disbursement of any assets to partially repay creditors. Why did our professor concentrate so heavily on this subject? Because the great majority of new businesses end up in this situation.
Our observation is that owning or managing a small business is not one for the faint of heart. They are courageous people who live with great risks not encountered by those in big corporations or the public sector. Some, who are lucky, achieve success quickly, but for most it takes years of hard work to develop a sustainable and profitable business. Those who spend their career in large organizations take a weekly or monthly pay check for granted. Small business entrepreneurs understand the struggle to pay their employees, their creditors and themselves.
As business coaches, we are constantly required to help business owners and managers face their daily challenges. During our sessions, we help them spend time understanding the overall status of their business and develop plans for increased success. In doing that, we address many of the issues listed above.