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Pinellas Park, Florida, United States
I founded Core Business Solutions with the goal of helping business owners improve operating results, add value, and recapture the energy and passion that was present when the business was new. We also have the expertise to assist start-up companies create the foundational structure needed to provide the best opportunity for the business to grow and prosper in uncertain economic times. Our goal is to help the business entrepreneur/owner, through mentoring and coaching, develop or enhance managerial skills while providing that independent and objective advice and expertise usually provided by a board of directors.
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Saturday, July 25, 2009

Top 7 Reasons Businesses Fail..Part Five

My past 4 blogs have reviewed the first four of the seven areas that I think contribute greatly to business failure. The first four were 1-A Lack of Planning(No business plan), 2- Starting a Business for the Wrong Reasons, 3- Insufficient Capital and the last reason reviewed was #4-"No Website". Of all the top 7 reasons businesses fail, #5 -"Poor Management" is high on my list in terms of frequency.

So what's the big deal regarding managing a business?

Many reports on business failures cite Poor Management as the number one reason for failure. Why?

The reason is that business owners (especially those who come from a corporate environment) lack expertize or even basic knowledge in areas such as:
  • Finance
  • Purchasing
  • Production
  • Marketing
  • Hiring & Managing Employees
  • Selling
Unless they recognize what they don't know or what they can't do well, and most importantly, seek help, business owners will soon face disaster. Each of these areas must be covered in detail in the business plan. Business owners must also be educated and alert to fraud, and put into place measures to avoid it.

Neglect of a business can also be its downfall.

Care must be taken to regularly study, organize, plan and control all activities of business operations. This includes the continuing study of market research and customer data, an area which may be more prone to disregard once a business has been established. This is precisely why the Business Plan (see #1 in this series) must be a living document that is reviewed at least quarterly or monthly for new businesses and annually after 2 years in business.

A successful manager is also a good leader who creates a positive work environment that encourages productivity. This means the business owner must always approach everyone working in the business with an upbeat manner. Any employee performance or attitude issues should be handled in private, away from the work area and documented.

A professional manager has a skill at hiring competent people, training them and is able to delegate. Remember: the definition of management is: 'getting things done through other people'. So you must find the best people which means hiring people better than yourself and letting them do their job. Avoid micro-management, set proper expectations and measure the results. Believe it or not, good employees want to know how they are doing, so be sure you have the correct reporting tools to let them know how they are doing, both as a group and individually.

A good leader is also skilled at strategic thinking, able to make a vision a reality, and able to confront change, make transitions, and envision new possibilities for the future. Change is a constant in business so embrace it and get it done!

In Stephen Coveys " 7 Habits of Highly Effective People" he describes how to "Think with the end in mind." So what's the end result you have in mind? How will you achieve it?
I strongly encourage anyone who owns a business to read Covey's book. It's a terrific road map to being an effective person in business and also in your personal life.

"You're at the top when your pleasant to the grouch, courteous to the rude & generous to the needy." - from Zig Ziglar

Next time I'll review the 6Th of the 7 Top Reasons Businesses Fail.

In the mean time:

Live Simply.
Speak Kindly.
Care Deeply.
Love Generously.

All The Best...Always,

Walt Morey - Executive Business Advisor- Accredited by the Institute for Independent Business


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