Posts Tagged ‘failure’
Someone else’s business failing can be bad news for you – if they are a customer. A bad debt of £1,000 can mean having to increase your turnover by perhaps £10,000 to claw back the profit.
So wouldn’t it make sense to spot your customer’s business failing before it’s too late?
There are broad indicators that can help you identify when a customer might be heading for trouble. For instance market conditions might change – a rise in the price of steel, exchange rates, new technology making current products obsolete and so on.
It is also helpful to understand why small businesses fail. However, there are some more specific and immediate indicators that can save you from unwelcome bad debts.
1. Visual check. Keep a close visual check on all your customers. Regular visits are great for customer relations but also a chance to soak up any visual signals of your customer’s business failing. Signals could be external property looking shabby, less staff with even less work to do, stock and inventory levels looking low, a quiet goods-in bay and most potent of all a ‘sense’ of gloom, a lack of a buzz. Almost tangible. But you have to visit. You can’t sense it over the phone.
2. Falling orders. A bit obvious but the process can be gradual so keep on top of customer trends. (Of course, it might be that you are being phased out in favour of another customer so you ought to know that too.)
3. Rising orders. No that’s not a typo. Watch out for rapidly rising orders. Your order of two widgets per week suddenly goes up to six widgets per week. Your customer is running out of suppliers and is leaning more on you. Avoid the temptation to take the volume, you won’t get paid. Read more »
Tags: business failure, customer, failure
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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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Failure is an “act that does not achieve success”. So to ask “how does failure breed success?”, we must first define success.
Success is “the act of achieving a desired or planned outcome”. This definition makes no reference to an absence of failure. In other words, success and failure can co-exist.
Pairs of muscles in the human body work antagonistically. One pushes and the other pulls. For instance, the biceps and triceps are a pair of muscles that work antagonistically for the common good of the arm – allowing it to bend and straighten. The arm cannot function without the presence of both.
In a similar way, success and failure work antagonistically for the common good of the project, task, or whatever.
They say that success is a journey not a destination.
But surely failure is the journey, success the destination. Read more »
Tags: business culture, failure, success
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