Don’t Fail Your Business

by | Sep 2, 2017 | Business

I want to keep this positive, because it is a sore and painful subject, however even though the fail rate percentage is high, I believe with the proper steps and disciplines adhered to, the success percentages can increase. In working with clients the question inevitably comes up, “when I can expect to see a return on my investment?” Seems like a reasonable and straightforward question, but to answer accurately and to do so requires a number of factors to be understood and established. In an article posted on  Smallbistrends.com – states “according to the SBA Office of Advocacy, about two-thirds of businesses with employees survive at least two years, but only 50 percent make it to the five-year mark and just one-third celebrate their 10-year anniversary.”

Here are 10 reasons why the author states a business could close their doors early. While their opinion and listing can be seen as a contributing factor in a demise, they’re not the only reasons.  

  1. Starting for the wrong reason
  2. Insufficient capital   
  3. Improper planning
  4. Poor management and leadership
  5. Expanding too quickly
  6. Failure to advertise and market
  7. Lack of differentiation
  8. Unwillingness to delegate
  9. Unprofitable business model
  10. Underestimating the competition

Here are some pointers that I cover with a client to recognize the opportunity in their business to see a good and solid outcome.

    • Understand every detail of your product
    • Know your personal capabilities and strengths and where you best fit into your business
    • Have accurate and up-to-date costs on all first time expenses including equipment, building improvements, installation cost etc.   
    • Stick to an agreed upon budget to open the doors, avoid emotional based modifications, enhancements and changes
    • Know the monthly fixed cost to cover rent, payroll, taxes, utility and insurance to establish a “break-even” day
    • Do not use funds strictly allocated to cover a monthly shortfall and for 8 months minimum or until the business maintains a break-even point for several months from its sales      
    • Know the cost of goods on every product unit, ingredients + packaging + labor + overhead + shrink = total cost of goods
    • Know the gross margin on every product from where it is stored
    • Payroll yourself, keep personal spending within your weekly paycheck budget, Do Not take money from the business for personal use
    • Look at the business as the most senior employee and respect the business first before making every decision

There are more, but I believe these can be the core for a sustainable business. I have written a three part step to get your business started, I believe a good first step not only to start, but be a survivor.

Part 1:

Part 2:   

Part 3:

Contact Darryl, he can help get your business started and show you the tools to survive and be successful.   

Darryl David
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