Business Success or Failure Is 100% Your Fault

Nobody starts a business with failure in mind. Yet small business owners by themselves rarely do what needs to be done to avoid failure. Small business failure statistics are all you need to look at to realize most small business owners don’t do the right things when it comes to starting and running their business. Many fail in the first 5 years and even those that are able to survive the first 5 years are likely to fail before they reach 10 years.

With each small business failure, there are devastating consequences for the small business owner and his/her family. Most small business owners put every penny they have and can get their hands on into their business not to mention the time, energy, and personal sacrifices they make. The devastation caused by their business failure goes far beyond just them. It extends to their community, their state, and the country. A staggering amount of resources and opportunities are lost due to the vast number of small business failures. Sadly, business failure can be avoided by understanding why it happens and doing the things necessary to elude it.

Why It Happens

Michael Geber author of The E-Myth Revisited states in the forward of his book what he believes to be the primary reason:

“The problem with most failing businesses I’ve encountered is not that their owners don’t know enough about finance, marketing, management, and operations – they don’t, but those things are easy enough to learn – but that they spend their time and energy defending what they think they know.”

In other words, Mr. Geber believes small business failure happens because the small business owner thinks they know more than they do about business.

During my professional career as a business executive and consultant covering 30+ years and more than 120 consulting engagements with small business owners, I have seen this be true time and time again – the owner is 100% the reason for the struggle and failure of his/her small business. Small business owners like to practice insanity which is defined as continuing to do the same things over and over expecting a different result. There are three bad traits common to small business owners causing their habitual “insanity”:

Bad Trait #1 – Think they know what they don’t know.

Here’s an example of this from one of my past consulting clients James who is the owner of a residential and commercial contract painting company. James made the following statement when I asked him about his method for pricing work: “My father started this business back in 1956 and taught me everything I needed to know about it. I was 15 years old when I began working here. The way I price is the way my dad taught me. It has always worked and it is the only way it can be done for this business!”

At least 5 years before this conversation James’s company began losing profitability and every year the losses had increased. James believed his dad had taught him everything he needed to know and he would never need to know or do anything different. He was wrong yet he practiced insanity by continuing to do things just like his dad taught him somehow thinking he would get a better result. He only got a better result once he changed and learned that there was a different and more effective method.

Bad Trait #2 – Suffers from the Field of Dreams Syndrome:

The Field of Dreams syndrome is based on the movie by the same name. It is the belief that customers will come just because you have a business.Mike, the owner of a limousine service company, made this statement when I asked about how he marketed and advertised his company’s services: “I am listed in the yellow pages and I rely upon word-of-mouth from past customers. I’ve never had to do anything else to get business. The phone use to ring all of the time. I don’t understand why the phone isn’t ringing like it did. I have the nicest, newest, and cleanest vehicles out there.”

Mike believed people would call his company just because it existed and had (in his opinion) superior equipment. Not the case as he was experiencing with a continual decline in sales every month.

Bad Trait #3 – Belief that outside forces cause most if not all of their business problems.

George owns a residential roofing company. Here is what George said to me during our initial discussion concerning the problems experienced by his business: “I don’t know how you can help me, Carroll. My company does roofs and nobody is getting their roof done. And those that are getting their roof done are hiring the jack-leg running around in his pickup truck charging less than what my material and labor cost. I can’t compete against that guy. I’ll be glad when the economy picks back up so things will be back to normal.”

George believed there was nothing he could do to improve the condition of his business. It was all the jack-leg’s fault and what the outside world was doing it to him and his company. George didn’t think there was anything he could do to gain control over any of it. Not true! George in time learned that he was the only one who had the power to change his company’s condition and make it better.

There are other “bad traits” held by small business owners but they all are due to the small business owner and his/her erroneous beliefs.

How It Can Be Avoided

The reality of being a small business owner is you are the sole reason for your business’s failure or success! To correct the most common problem of small business you must be willing to do what Michael Jackson’s “Man in the Mirror” song says – stand in front of the mirror and commit to the person you see there to do what is necessary for your business’s success. If you don’t, you, you family, community, state, and country will certainly experience the devastation of your business failure.

It does not matter where your small business is in its life cycle you must do the following to ensure your business’s success.

1. Bury Your Ego and Be Open Minded.

Ego makes you close minded and erects a brick wall that keeps you from receiving and using available and valuable assistance such as advice, knowledge, information, and help. No one is perfect and knows everything there is to know. If you allow your ego to make you believe you “know it all ” and are right when in fact you are not, you will miss out on important opportunities to improve. Removing your ego will allow you to learn and discover what you lack and need for improvement to take place. You will also find people more willing to help and provide you with things that will be of benefit to you.

2. Create a Passionate Vision.

The majority of small business owners I have worked with have a business which provides them with nothing more than a job. They have from the beginning structured their business to do nothing more than that. Now, they hate their business and are extremely unhappy. Their business is boring, takes all of their time, and provides them with little satisfaction, sense of accomplishment or fulfillment. If you want to be successful and happy you must do something you can be passionate about. This passion needs to be focused on accomplishing something specific not just for you but for others as well. Think about people who have been wildly successful such Steve Jobs, Bill Gates, Oprah, and Dr. Phil. The one thing they have in common is their overpowering drive (i.e. passion) to change the world in a positive way. You can do the same once you create a passionate vision for your business.

3. Learn to Learn.

Never have I worked with a business owner who had a business without competitors. The typical business owner I work with has problems and their competition is doing better than they are. When asked why they think they aren’t performing as well as their competition they say something like “the competition is much bigger and can afford things I can’t such as newer equipment, more advertising, or better location”. These are all superficial reasons and represent nothing more than excuses by the business owner. The reality is their competition is succeeding because they have figured out how to be more successful. You must learn to do the same. If you don’t believe you can do it on your own then get help and get it now before it is too late.

The business world is a highly competitive place. Changes are taking place in all fields and industries worldwide at an increasing the rate of change. To survive and succeed as a business owner you must continue to learn, do things in new and innovative ways, and be passionate about what and how your business serves its customers. If you overcome the bad traits of most small business owners you will be not only have a successful business you will also be happy and enjoy your business more than you ever thought possible.

One of the easiest and fastest ways to overcome any bad traits you might have as a small business owner is to get help from a professional who trains small business owners to be successful. You can receive such help in a unique, fun, fast, easy and affordable way by taking my 12 session practical “Master of Business” owner training program.

Home Internet Business: 10 Reasons For Starting A Home Internet Business

Why start a home internet business? People start businesses for various reasons. Many times when people think of starting a business, their mind easily focuses on ideas of doing conventional businesses. Not many people have known how profitable online businesses are. Through this, I would like to point out some of the reasons as to why you should start a home internet business.

1. Make money

The major reason for starting a home internet business is to make money. The internet has opened great opportunities to many people to make money. In fact, the richest men in the world have made their fortune from the computer and the internet. Luckily, home internet businesses do not require much in terms of investment. Just having a computer, internet access and products to sell are enough to start your online business.

2. Enjoy your hobby

Are you friends with the computer and the internet? If so then a home internet business is the best business for you. Although making money is the prime reason for starting a business, you can best benefit from it if you are passionate about it? Passion is the fuel to success in home internet businesses.

3. Keep yourself busy after retrenchment or retirement from active service.

Most people start home internet businesses to prepare themselves for retirement or retrenchment. If you are currently employed with a good salary but you are worried of retirement or being retrenched unexpectedly, the best advice for you is to start and grow slowly your business.

4. Fulfilling your desire of working for yourself.

Are you employed but dissatisfied with your current pay and the treatment you get at your work? Are you looking for financial freedom? Starting a home internet business will not only create a reliable opportunity for you to become self employed, but it will also enable you to create multiple streams of income. Remember that relying on one source of income is like putting all your eggs in one basket. When you fall, you lose all your eggs. Most successful online marketers had the same experiences, which forced them to start slowly their home internet businesses.

5. Using savings accumulated over some years.

Online business does not require much money to start. If you have saved some money and you are looking for where to invest it profitably, starting a home internet business is one of the most economic, profitable and convenient ways of investing your savings.

6. Experiencing challenges in businesses.

Are you looking forward to work or businesses that give you some challenges? Online businesses provide a lot of room for creativity. Yes, coming across challenges in life is healthy and enables many people to unlock their mind.

7. Creating a job for yourself and other family members.

Starting a home internet business can open great opportunities for you to create jobs for your family members just from your home with your computer and internet connection.

8. Render better services and develop your community.

Are you looking for jobs for the people in your community? The internet has great opportunities for all people of walks of life. You can start now your home internet business, develop it and finally use it to train and create jobs for other people in your community. For instance, you can create article writing jobs for the youth to write articles in different fields of their expertise, which you can buy and use them for your online marketing campaigns. You can only be limited by your own imagination.

9. Practicing gained skills and knowledge.

Are you skilled in anything related to online business such marketing and web designing? Are you looking forward to putting into practice your skills and knowledge? When you start a home internet business, you have high chances of succeeding. Prior knowledge is an advantage in business and it puts you ahead of others in business.

10. Establishing online your conventional business.

Do you already have a business like a salon, internet café, restaurant or something? Taking your business to another level by establishing it online is a very wise idea. Apart from selling only your products, you will widen your sources of income by selling online other affiliate products related to your home internet business niche.

Lastly, the reasons for starting a home internet business are key determinants in the performance of your business. What’s your reason?

Stress Testing the Owner-Managed Business

Conducting a thorough stress test on an owner-managed business will determine strategic planning deficiencies and enable the success of the business. A stress test for a cardiac patient consists of monitoring the patient on a treadmill to see how well the heart reacts when placed under the stress of sustained exercise. A stress test for a structure involves placing it under a higher than expected load to see if it is as strong as engineering predicts. Financial regulators place banks under stress tests by using sophisticated software models that allow the testing of certain stresses alone and in combination with other events to see if banks have sufficient capital. These testing procedures consist of the initial inquiry, the application of the stress situation or situations, and an analysis of the performance under stress. It is not necessary to construct a complicated piece of equipment or a sophisticated computer model to accomplish a stress test on an owner-managed business.

The inquiry is to ask “What if…?” The application is to follow through the consequences of the event. If a probable event could occur in the marketplace, the application of the inquiry would be to forecast the business experience in the year after the event occurred. If the occurrence of the event will cause the business to lose money without recovery, the application of the inquiry causes the business to fail the stress test. If a business has three owners, the inquiry could be “What would the business experience in the year after the death of one of the owners?” Depending on the role of each in the business, the application of the inquiry would have a different result depending on which owner died. Would it make a difference if a certain owner quit owning because of disability instead of death? Most definitely, for example, if the buy-sell agreement is funded with life insurance, in the case of disability there would be no immediate funding from a life insurance policy. Would it make a difference if the owner left the business? Most definitely, for example, if the owner left to compete with the business and reduced the foreseeable revenue for the business. Would the application of the inquiry cause the business to fail the stress test under any of these inquiries?

While a computer model is not needed, there must be a way to project the economic activity of the business. Generally this can be the profit and loss format of the business accounting on a spreadsheet showing month-to-month performance for a year and allowing for adjustments. With some businesses it may be more meaningful to use a cash-flow format rather than a strict profit and loss format.

Where a probable event in the market will cause the business to lose money without recovery such that the application of the inquiry causes the business fails the test, the analysis and action required will be to anticipate that event with action to create new products or services for the market or find different markets for existing products and services so that the event no longer will cause a failure of the business. If the business cannot generate as extra cash the amount required to make payment to an owner pursuant to existing buy-sell arrangements within the term of time required for the payment such that the stress of one owner leaving the business in a certain way will cause the business to fail the test, the analysis and action required is to adjust the payment and terms of the owners’ agreement to more realistically reflect the reality of the business so that the owner can be paid and the business continue.

An important part of the review of a strategic plan for an owner-managed business is to start the stress test procedure by asking “What if…?” Do this many times. The more thorough the stress testing procedure, the better the plan will serve the future success of the business.