second year, after five years or beyond, the reality is that the majority of
small businesses will not succeed.
It could be quite a depressing thought, but I don’t mention it to make you
feel bad, rather to impress upon you how lucky you are to be in business
and to consider the reason why you’re still here and what you can do to
So, what is The One reason why you will fail in IM? Or to put a more
positive slant on it, what’s the ONE reason why you’ll SUCCEED in IM?
The answer to both questions is the same, and rather than labouring the
point, the reason is You!
That may seem obvious, but I’ve spoken to many ex-business people about
how and why their business collapsed and very few will take responsibility.
A recession, the competition, bank foreclosures, bad debt, failed
contracts, staff issues, law suits… the list goes on.
Even when pushed, many will not take responsibility. The real causes are
not in the list above, the real reason for business failure is a failure to
respond appropriately and in a timely manner to anything that comes
along, and preferably see it coming before it happens.
In actual fact, studies from the major banks in the UK have revealed that
the reason businesses fail is lack of cash flow. Well, that’s like saying,
everyone dies because their heart stops! That may be true, ultimately, but
it’s not the real cause.
I lost my first business early on in 1993. I was in manufacturing. I’d been
struggling to meet deadlines for orders as I’d not been paid for a few jobs
which meant that I couldn’t pay my supplier’s bills. They’d stopped
delivering to me, so I didn’t have the raw materials to complete jobs. I
was being crippled by the bank’s interest charges (around 20%), missing
loan repayments and living on my unauthorised overdraft.
Needless to say, it couldn’t last. Wow! That little recession we had back
then really killed my business…
No it didn’t. I killed my business. I didn’t gather together enough starting
capital, I didn’t market it well, I didn’t organise… anything, I managed staff
poorly, I didn’t ask for help from the right people… believe me, this list
goes on and on.
But I didn’t come to that conclusion until about a year after it folded.
That’s when I began to study business. I bought books and tape series and
most importantly, I opened my eyes to the world around me. I studied
successful businesses. I even went to meet some to ask them why they’re
successful. I became passionate about being my own boss like I never had
been before. What I learned and experienced over those few years has
allowed me to respond differently to situations that would otherwise have
been disastrous for my business.
I now make much better decisions, not always right, but I learn from them
and move on. I try to anticipate trends rather than react to them. I’ve
got office systems in place so I’m organised. I’m fully insured both for
business and life. Everything is backed up. I’ve got friends that support me
and I frequent places like this and open my eyes and ears to watch what
to do and what not to do. Oh, and yeah, I have no debts whatsoever, not
even a credit card!
With the onset of this ‘economic down turn’, this ‘credit crunch’ or
whatever euphemism for recession is being used, you’d better be thinking
how you’re going to capitalise on it. Because, if you just go with the flow,
you’ll be washed down river with the rest of the people who used to run a