Did you say “Why do small businesses fail – nearly always?”
Does that really mean that MOST small businesses fail? Ouch.
Like it or not, 75% of all small businesses in the UK fail within their first 5 years. So, why do small businesses fail ? Let’s take a look:
- Lack of experience This is either lack of experience with the main theme of the business or simply lack of experience at running small business. Or both. People who have good ideas don’t neccessarily run good businesses. “It’s my train set so I’ll drive the train” tends to prevail. Personally I would rather employ a train driver. a.k.a. The Intrapreneur.
- Insufficient capital This can be expenditure on capital items as well as working capital i.e. the cash needed on a day to day basis to keep the business afloat. Arises from a combination of poor planning, over enthusiastic sales estimates and lack of a contingency fund. Read more »
Tags: failure, small business planning, small business startup
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How many times have I heard small business management tell me “I don’t need a business plan”? Let’s get this straight. All businesses plan. Whether they like to think they do or not. As soon as you order additional inventory or take on new staff in expectation of a greater workload, then you’re planning. So the issue is not whether you should plan or not, you can’t help but plan. The issue is how do you go about business planning ? The only businesses who may legitimately say ”I don’t need a business plan” would be small scale and steady state – in other words not growing in turnover or contracting. In such a case everything stays more or less the same week in week out. Thus all the information is probably in the proprietor’s head anyway and that’s fine. But as soon as growth or contraction is imminent, you can no longer say that you don’t need a business plan. It becomes critical to make assumptions about how that growth is going to look and that means, you guessed it, planning. Let me put it this way. Let us suppose that I have in my possession a piece of software that allows me to input your personal details. And from that I am able to map out a model of the next ten years of your life. Wouldn’t you at least be a little curious? What if you could see that at the age of 39 you were going to die of sclerosis of the liver from excess alcohol intake. Wouldn’t you like to know that? Wouldn’t you like the chance to do something about it now and avert such a calamity? Read more »
Tags: small business myths, small business planning
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Selling The Idea Of Selling
Network marketing prospecting is the real heart of your network marketing business – selling the idea of selling. In other words, whilst selling products to friends, relatives and other contacts starts the sales commissions rolling, there’s a better way.
The real money is to be made through proactive network marketing prospecting and bringing more and more people into your network. If you can get 5 people to join you and they each get 5 people who in turn each get 5 people and you get sales commissions from all of them, then you can make some serious money.
However, network marketing has picked up a bit of bad karma. The evangelistic methods passed down from network leaders through their distributors to unsuspecting public like you and me has left a little problem.
Tags: multi-level marketing, network marketing, sales, Small business sales techniques
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Make yourself indispensable. That must be the key to a long and successful small business career surely.
We’ve all seen them. Strutting the office like a displaying peacock. Assured of the fact that no one else could do the job they do. It would be impossible. And therefore they are indispensable.
How wonderful. How wonderful that if they got run over by a bus this afternoon the small business’ vertical pipeline would come to a standstill because they were no longer able to carry out their work.
Ah yes you say but you have to think of No 1 first, yourself. Make yourself indispensable and that small business will need you more. And they will pay you more and love and nurture you.
Well let me tell you how it is from the small business perspective: They hate “indispensable “. They loathe “indispensable “. If there’s one thing they can’t abide, it’s “indispensable “. Read more »
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Network Marketing, MLM, multi-level marketing. Whatever you call it it’s the same thing, but exactly what is Network Marketing and is it a viable business model?
I’ll be kind and give you a short answer and a long answer, take your pick.
What is network marketing ? – the short answer:
Network marketing is a particular type of business model which involves normal people like you and me (well, almost normal in my case…) selling a company’s products to friends, relatives and other contacts whilst at the same time encouraging those same people to take up the same mantle and sell the same products to their friends, relatives etc
This is building the network and your sales commissions are based on everyting sold within your network. Seems simple enough. If you’ve got the energy, let’s delve into this in a bit more detail. Read more »
Tags: mlm, multi-level marketing, network marketing
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How often have I spoken to entrepreneurs with a sound idea and a willing investor who spend too much time trying to get the best deal out of the investor, losing track on creating value from the good ideas that brought them together in the first place . This is a typical question:
I currently own 70% of Company X Ltd and have 20% against a loan note for about £3K. The other 10% can be brought back for £2.5K-£5K. I also own 50% of Company Y Ltd. The question goes on to explain the relationship between the two companies, then continues: I feel that if I could structure my situation better, I may be able to retain ownership and a larger slice of the pie. If you have any ideas on how I could structure my situation, that would be great.
At the moment you have no value. Everything exists as ideas or shell companies or partnership agreements or something else. Nothing is earning any money for you currently. Spending time trying to maximise your share of something with no value has little value either. Read more »
Tags: small business ideas
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Entrepreneurship and isolation, do the two go hand in hand?
Sir, I am both entrepreneurial and social. As a recent university graduate I miss being among other people. Being around others invigorates me. As I grow my business and hire new employees will I feel reinvigorated? Does it matter if the people you work with are your “equals” or are people you hired?
Isolation is not a pre-requisite for Entrepreneurship, although it is easy to fall into this mindset.
Something that is very difficult to predict prior to starting your own business is how lonely it is potentially going to be. You’ve got two employees, neither of which even vaguely understand what you’re all about. You’ve got 10 customers and 3 suppliers and they’re not interested in your personal welfare either. So what to do and who to turn to? Read more »
Tags: entrepreneur, leadership
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Hot, Flat and Crowded – Thomas L Friedman
The do-gooders have got it all wrong. They have been telling us for eons that we have to save our planet. Rubbish. Our planet is just fine. It’s our ability to stay living on a planet that’s becoming hot, flat and crowded that’s the problem.
You see, the planet doesn’t care if we are here or not. And the bad news is that we are living on borrowed time and not doing very much about it.
“Hot, Flat and Crowded” by Thomas Friedman goes some way to helping us understand this dilemma and puts together a broad template to help get us out of this mess. But it’s not going to be easy and success is by no means assured.
So what does Hot, Flat and Crowded refer to? Well, in a nutshell…
Hot – greenhouse effect, climate change, fossil fuels, rising sea levels and so on.
Flat – An increasingly connected and enabled world through the internet and improved telecommunications where individuals across the globe can prosper as never before. But this extraordinary expansion of the ‘middle class’ brings its own problems.
Crowded – A global population of 6.7 billion rising to 9 billion by 2050, where are they all going to go? What will they eat? How will they (ie we) survive? Read more »
Tags: small business startup
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So Ryanair are considering charging passengers to use their inflight toilets. Have they proved that customer service really doesn’t matter after all, or will Ryanair have stepped beyond the pail on this one?
Ryanair’s latest wheeze to charge for their inflight toilets is the latest in an unofficial socio-economic experiment being run by the company. To what level can they continue to strip customer service out of the system before people will stop buying their cheap tickets? Just how badly do customers want to get to destinations for next to nothing? And, to be fair, it’s a fascinating experiment to watch.
At the moment it seems OK that luggage is lost, flights are cancelled without warning or recompense, grumpy tetchy service is endured, surprise charges at check-ins are standard, customer service lines are unhelpful and stampedes for boarding gates are the norm. Read more »
Tags: customer service
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OK, we’re half way through our preparation to face the Dragon’s Den. If you missed Plan To Face The Dragon’s Den Part I then refer back. Let’s move on to the next stage, steps 7 -12.
A business idea on its own is worthless. The world is awash with ideas. You must elevate your business idea to something of commercial value before you walk into the Dragon’s Den. You need proof. Proof essentially breaks down into two parts:
- Does your product work? Make sure you have a working prototype, or better still the real thing. A malfunctioning prototype and you can kiss a warm reception goodbye.
- Will anyone buy it? Research is of little value. Particularly on the scale that your limited funds are likely to reach. Try selling your product first. Get listings from high profile retailers/ wholesalers. If you can’t get listings, get a purchase order. Get a letter from the CEO saying how he will stock your product. Get anything that provides evidence that your product will have buyers. And lots of them. Read more »
Tags: dragon's den, small business planning
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