How NOT to Succeed in Business without Really Trying
Posted by Mark Martella on Tue, Aug 07, 2012 @ 1:15 PM
Last month, I wrote about the first five reasons of my top ten reasons why businesses fail. I based my selection from the 30 reasons listed in Napoleon Hill’s book “Think and Grow Rich”. Here are the second five in no particular order of importance.
6. Lack of a well-defined power of decision. Making decisions is one of the key skills necessary to be a successful entrepreneur. If you’re unable to make quick decisive plans with regard to your company, indecision results in no decision. In the new economy, businesses that fail to react in a timely manner will be left behind and not in business for much longer. Your business’ success depends upon you making prompt decisions and providing the required leadership for your employees. As the owner of the company, your goal is not to be friends with your employees, but rather, a leader of them, for not only your benefit, but for the benefit of your employees and their families.
7. Over caution. Part of being an entrepreneur requires the ability to take risk. Any time someone opens their new business, there is that fear that no one will come through the door. However, if you have spent the time, putting together a proper business plan and required systems in place for not only your services but you’re marketing as well, the risks are diminished. Being too conservative, over cautious and not willing to take any chances will lead to failure. One philosophy followed by some entrepreneurs is “ready, fire, aim”, meaning that if you just keep “aiming” until you get the product, service or advertisement “perfect”, you may never make the decision to “fire” and take the required action to move your business into profitability.
Read: How NOT to Succeed in Business without Really Trying – Part One
8. The habit of indiscriminate spending. Obviously a clearly defined budget that your business sticks to is crucial to a business’ success. Spending more than budgeted because you have a good month is a big mistake, and not planning for possible downturns and bumps in the road with regard to your business is fatal. Saving for a rainy day is an important part of your business plan. Budgets must be monitored carefully and adhered to religiously.
9. Guessing instead of thinking. Too often assumptions are made by business owners without a factual basis. In my line of work, I often have clients come to see me after making bad decisions when we could have directed them towards a proper path. Consultation with professionals such as attorneys, accountants, architects, engineers and other advisors, is invaluable and ultimately will save you more money than trying to fix mistakes down the road.
10. Lack of capital. Again, if I were ranking these, this would be number two. Often I see owners starting to launch a business which, if given time, would be successful. However, they are under capitalized, expect to reap great revenues in a short period of time, and by month six, they can’t even pay their rent. I generally tell clients when starting a new business that they should have at least 6 to 12 months of their personal living expenses put away in order to survive in case there is no money coming in from their business, and that they should have access to lines of credit (not credit cards or a second mortgage on their home) or other funding sources that will carry the business through the first 12 months based on conservative projections of income.
This is the last five of ten reasons your business could fail. I hope the foregoing will give you something to think about with your business. If you have any questions or comments please feel free to contact me, and I’ll be happy to discuss these with you further.
Originally published in the Charlotte County Chamber of Commerce June newsletter. Mark Martella, Esq., is the Managing Member of the Martella Law Firm, P.L. with offices in Port Charlotte and Sarasota.
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