Why Businesses Fail
It’s not defeatist to talk about why businesses fail. Part of planning to succeed should include planning to avoid failure, and that can only happen if the planning addresses the reasons businesses go bust. In this video, Michael explains the 5 main reasons business doesn’t succeed:
- The business owner doesn’t have the right mindset.
- The business runs out of cash. Failure to keep on top of the cash flow means the business owner cannot pay bills or meet the demands of creditors. It’s vital (and beneficial) to manage and understand what influences cash flow.
- The business doesn’t attract the right type of customers. All customers are good, but some are better than others. A successful business attracts customers that pay well, are loyal, help the business develop, and recommend it to others.
- The business owner doesn’t invest in developing the right people in his or her network. This may include business partners.
- Finally, the business doesn’t have the right processes to really understand the business, make it more effective and highlight if the previous four areas are not on track.
Knowing these five reasons why businesses fail means it’s far easier to avoid them. In the next video, we’ll examine what’s your Plan Z – the ultimate away-from motivator.Go to Part 4 – The Importance of Plan Z
Starting a Business Video Series Index
- Starting a business – Introduction
- The Hero’s Journey
- Why Businesses Fail (this page)
- The Importance of Plan Z
- How Businesses Succeed
- The Balanced Scorecard
- Start With the End in Mind
- Increasing Revenue
- Health and Resilience
- How Mindset Affects Success
- Brand Proposition
- Conclusion and Review