Why do so many businesses fail?
It’s a simple question. Let’s start with the assumption there is a market for what you do and your initial capital investment is adequate (without these basics the business is doomed even before it starts)… So why do the majority of new enterprises fail? Is it bad marketing? Too little cash flow? Poor quality (product or service)? Failure to adapt to change? These are some problems that can tank a company and I am sure if we put our minds to it, we could come up with a much longer list of problems. However, these problems are not at the root of a business’ failure, they may have caused the final death blow… but these are really symptoms to a bigger problem.
I believe we can agree, that there are many technical financial, marketing and control reasons that could cause your business to fail. But I believe these are merely symptoms, and that most of the time a business’ fatal wounds are self-inflicted and they come from a lack of focus and clarity.
Let me explain, everyone can tell you WHAT they do. Most business owners and their employees can tell you HOW they do it, too. But many cannot explain WHY they do what they do. Without a clear mission/vision for your company it is impossible to create a focus on how and where you can WIN in the marketplace. It is a clear focus on who your customers are (and why), and how you are going to compete that will allow you to be successful.
No business large or small can be all things to all people. You need to carefully choose how you are going to compete, where you are going to compete and for what are you going to compete. Decide how your business is going act and write it down… make it the center of what you do. This focus will keep your business on track. By being clear on your vision you can…
- More readily identify risk
- Control your growth so it doesn’t outpace your capacity
- Make better hiring decisions
- Build customer loyalty
With a clear focus and approach you can easily establish benchmarks and measures for your business. You can invite your customers to join your “mission” and your customers become empowered in building your company. With a clear focus your actions are consistent and as a result, you can more readily see what is and what is not working… and you can adjust.
Success starts and stops with a singularity of purpose. It doesn’t mean doggedly sticking to something that doesn’t work, rather it means knowing where you want to go and why you want to go there. It allows all the other details to fall in place.
I leave you with a quote from the movie City Slickers… The Billy Crystal character (Mitch) asks Jack Palance (Curly), “What is the meaning of life?” and the exchange goes…
Curly: Do you know what the secret of life is?
[holds up one finger]
Mitch: Your finger?
Curly: One thing. Just one thing. You stick to that and the rest don’t mean shit.
Mitch: But, what is the “one thing?”
Curly: [smiles] That’s what *you* have to find out.
Find your ONE THING!