Home
>
Strategic Planning
>
The Chief Cause of Business Failure & Success

The Chief Cause of Business Failure & Success

Business rises and falls on leadership. According to business guru, Brian Tracy, "Leadership is the most important single factor in determining business success or failure in our competitive, turbulent, fast-moving economy." Still not convinced? Based on a study by Jessie Hagen of the US Bank, here are the main reasons why businesses fail:

? Poor Business Planning
? Poor Financial Planning
? Poor Marketing
? Poor Management

Proper application of these key factors is a function of good leadership. Let's look at some of the conclusions of the US Bank report. According to Hagen's study, in the Business Planning category, 78% of businesses fail due to lack of a well-developed business plan. It boggles my mind that so many people go into business without a plan, as if it were the ice cream flavor-of-the-month! Is it any wonder that when I came across the DEA Police & Government auction site of confiscated property, there is a gleeful statement that declares, "Most businesses fail within their first two years, so chances are, you will come across some relatively new merchandise. At (our) auction, get what you need without paying full price."

If you just rolled out of bed with 'a great business idea' and don't want to be a part of this grim statistic, run to your nearest bank, get a free business plan template, and write your plan now! Honor the time-proven clich?, "If you fail to plan, you plan to fail." Leadership is about planning for success before it happens. Sun Tzu, the 6th century Chinese philosopher, in his epic work The Art of War, gave some sound business advice that still applies today: "When your strategy is deep and far-reaching, then what you gain by your calculations is much, so you can win before you even fight. When your strategic thinking is shallow and near-sighted, then what you gain by your calculations is little, so you lose before you do battle."

In the Financial Planning category, a whopping 82% of businesses failed due to poor cash flow management skills followed closely by starting out with too little money. Business leadership is about taking financial responsibility, conducting sound financial planning and research, and understanding the unique financial dynamics of one's business. Before even starting a business, show your plan to your accountant and get their counsel. What a concept! Asking for the advice of someone who sees the bottom-line realities of business day in and day out; someone who sees the birth certificates, successions, and autopsy reports of thousands of business entities. It just makes good business sense. But many people will ignore this advice and eventually meet with business disaster. [Word of caution: don't rely on just one opinion. Get at least two or three opinions from different accountants to get a more informed view].

The third business failure factor profiled in the report, and a critical one, was Marketing. Over 64% of the businesses surveyed in the Marketing category failed because of owners minimizing the importance of properly promoting their business followed by ignoring their competition. Again, as a business leader, you must be able to effectively communicate your idea to the right people and understand their unique needs and wants. Leadership is all about taking initiative, taking action, getting things done, and making decisions. If you're not doing anything of significance to market and promote your business, you are most likely headed for business failure. I recommend every time you get up in the morning, jot down 5 new things you can do to promote your business and go DO them! If you can't think of anything to jot down, I highly recommend reading Jay Conrad Levinson's book, Guerrilla Marketing, which has oodles of useful information and tips on promoting for small business.

Know your competition. Leadership is also about providing value to people. If your main competitors are all providing a better quality and lower priced product than yours, how can you possibly create any value? Either you harness your strengths to provide different benefits such as speed, convenience, better service; lower your price and improve quality; create a different product for an unmet demand; or get out of the game.

Finally, one of the most important reasons why businesses fail is due to poor management. In the Management category, 70% of businesses failed due to owners not recognizing what they don't do well and not seeking help, followed by insufficient relevant business experience. Not delegating properly and hiring the wrong people were major contributing factors to business failure in the Management category.

Leadership is about knowing yourself ? understanding your strengths and weaknesses. Leaders are aware of their potential. Losers ignore their potential. Leadership is ultimately about influence and delegation. As a leader, you must have the humility to be able to surround yourself with people who are brighter than you and who can make up for your weaknesses and limitations so you can do what you do best: seize the day and lead! ■

Sharif Khan is a professional speaker and author of "Psychology of the Hero Soul," an inspirational book on awakening the Hero within and developing people's leadership potential. You can reach him at sharif@herosoul.com or by visiting sharif@herosoul.com

Sharif provides inspirational keynotes and leadership development workshops that entertain, educate, and empower. To book Sharif as a speaker for your next event call: (416) 417-1259.

disinfecting cleaning services Arlington Heights ..

In The News:

Android rolls out Emergency Live Video for 911 calls, letting dispatchers see real-time scenes during emergencies. Great for holiday travel safety.

Malicious Chrome and Edge extensions collected browsing history, keystrokes and personal data from millions of users before Google and Microsoft removed them.

Google's new Call Reason feature lets Android users mark calls as urgent before dialing, displaying an urgent label to recipients using Phone by Google app.

Medical history made as surgeons successfully restore sight to legally blind patient using world's first 3D printed corneal implant grown from human cells.

Data brokers aggressively collect your holiday shopping data to fuel scams and targeted ads. Learn how to delete your digital profile before 2025 starts.

Scammers are sending fake MetaMask wallet verification emails using official branding to steal crypto information through phishing links and fraudulent domains.

Learn what background permissions, push notifications, security updates, auto-join networks and app refresh mean to better manage your phone's privacy settings.

Criminals test stolen data by applying for deposit accounts in victims' names to prepare bigger attacks. Learn why banks won't share fraud details.

New study of 10,500+ kids reveals early smartphone ownership linked to depression, obesity, and poor sleep by age 12. Earlier phones mean higher risks.

A phone phishing attack compromised Harvard's alumni and donor database, marking the second security incident at the university in recent months.

AutoFlight's zero-carbon floating vertiport uses solar power to charge eVTOL aircraft while supporting emergency response, tourism, and marine energy maintenance.

A new phone return scam targets recent buyers with fake carrier calls. Learn how criminals steal devices and steps to protect yourself from this fraud.

New Anthropic research reveals how AI reward hacking leads to dangerous behaviors, including models giving harmful advice like drinking bleach to users seeking help.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Holiday email scams, including non-delivery fraud and gift card schemes, spike in November and December, costing victims hundreds of millions, the FBI says.

Holiday visits offer the perfect opportunity to help older parents with technology updates, scam protection and basic troubleshooting skills for safer digital experiences.

Swiss scientists create grain-sized robot that surgeons control with magnets to deliver medicine precisely through blood vessels in medical breakthrough.

Researchers exploited WhatsApp's API vulnerability to scrape 3.5 billion phone numbers. Learn how this massive data breach happened and protect yourself.

Travel companies share passenger data with third parties during holidays, but travelers can protect themselves by removing data from broker sites and using aliases.

Xpeng's humanoid robot moves so realistically that crowds believed it was fake, marking a major advancement in robotics technology ahead of 2026 commercial launch.

Researchers discover phishing scam using invisible characters to evade email security, with protection tips including password managers and two-factor authentication.

iPhone and Android users can reduce battery drain and data usage by restricting Background App Refresh to Wi-Fi connections instead of mobile networks.

Scammers nearly stole an Apple account by exploiting the support system with authentic-looking tickets and phone calls, users can protect themselves with safety steps.

FoloToy restored sales of its AI teddy bear Kumma after a weeklong suspension following safety group findings of risky and inappropriate responses to children.

Threat intelligence firm Synthient uncovers one of the largest password exposures ever, prompting immediate security recommendations.

The Chief Cause of Business Failure & Success

Strategic Planning