3 Critical Reasons Why Owners Let Their Businesses Fail

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Saturday 10:31pm

Sheffield

There is a problem – definitely in the UK and more widely in Europe and small businesses in the developed world – and it has to do with how much work we’re doing.

Many businesses are not productive enough – the amount of work done by each person in the business is flatlining.

And this is a problem for one very simple reason.

As more people look for work, including from the vast labour markets in India and China, the supply of qualified, skilled people increases.

Existing businesses will face more competition from more places – and if they’re not getting better at what they do all the time, then someone else will take them out.

So why do small businesses, in particular, struggle to keep up?

To start with, there are three things they can do to improve their businesses – they can invest in better systems, create better processes and hire better people. And this creates three problems.

1. They’re Too Busy Paying Rent To Worry About New Technology

Most businesses owners are neck deep in work.

There are customers to deal with, suppliers to shout at, employees to manage, rent and wage bills to pay and tax to collect and give the government.

Almost every small business owner is spending too much time working in the business to step back and make the time to work on the business.

So – wanting money out of them for something they don’t understand is not going to go down well.

However good a new technology – most business owners just haven’t got the time to get their heads around it and work out if they will benefit from it.

2. They’re Entrepreneurs – Not MBAs Or Accountants Or Lawyers

May people who start businesses have a passion for what they do, or they’ve taken over the family business, or they spotted a gap in the market for a product or service.

They’re creative opportunity spotters, risk takers and problem solvers.

That’s great when you need sheer force of will to convince suppliers to give you credit, customers to give you business and people to work for you in exchange for promises.

It’s not so good when you need to pass a security audit or comply with GDPR or file an environmental compliance application.

Often businesses don’t have the skills in-house or the contacts outside to get qualified advice on what they should do and how they can do things better – whether it has to do with improving sales and operations, cutting costs or having better contracts in place.

3. They Don’t See The Point Of Investing In Training

This is the hardest one for many business owners to get – and it’s the equivalent of shooting themselves in the foot.

You only have two options – you can hire someone with the skills you need, or you can train them to the level you need.

Many business owners don’t want to pay for training. They see that as an immediate cost and, once the person has been trained, what happens if they simply leave?

All that investment disappears. Instead, why not just hire someone that another company has spent a lot of money to train?

That’s Why They Die A Slow, Lingering Death

People don’t want to mess up their business – they just do because sorting things out for the long term is just so much harder than dealing with things right now.

But we should… think about these three sayings:

  • If you don’t make time to exercise, you will have to make time for illness.
  • Forewarned is forearmed
  • If you train people, they may leave. But, what if you don’t train them and they stay?

If you’re too busy to fix your business now – then it will be a lot harder when the competition has moved in and taken most of your customers.

Understand the value of good advice.

And – train your people. Having a good training system in place that takes inexperienced people and turns them into superstars is the best insurance against having to hire superstars that will leave you the first chance they get for a better offer.

It takes one set of skills to create a business. It takes another set of skills to keep it alive.

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