Is Your Business at Risk of Failing?
When big businesses fail, we are usually shocked. How could that happen? How could a business of that size get it wrong? How could experienced CEO’s and business leaders, running big businesses with lots of customers get it wrong?
Well, they can, in the same way that small and medium sized businesses do.
The reasons behind failure are very similar – it’s just the scale that’s different.
According to ONS business failures are increasing and in some sectors more than others; both retail and energy have seen a high proportion of failures in the last 18 months.
Each business failure will have it’s own story. Each business will have it’s own reasons for failing and bad luck is not one of them!
1. Ineffective leadership – according to Forbes article ‘Businesses don’t fail, leaders do’. Over-confident leaders who are making bad decisions?
2. Poor financial management – spending other people’s money or taking too many risks simultaneously.
3. Weak cash management – all goods and services do need to be paid for, but its often an ‘after thought process’.
4. Fast growth on dodgy foundations – no detailed process or controls on which to build solid growth.
5. Little or no risk management – clarity on what the risks are and how they are being managed.
6. Terrible customer service – customers will vote with their feet and leave if they experience poor service.
7. Lack of vision and strategy – not being clear on your overall purpose for being in business; what your plans are and where are you heading.
8. Lack of innovation – the global economy is moving at a fast pace. Disrupt or be disrupted.
9. Inexperience and no clear accountability – innovation is great but what about execution? Who is doing what and by when?
….are among of the common ones.
What are you doing right?