Small Business Failure: The Three Reasons
You'll Fail And How to Avoid Them
By Tom Egelhoff
 If this is
your first business, or if you are starting a home based business
that you hope will be a full time business, there are some concerns
you must address and correct if you are to be successful.
First you have some self correcting work
in areas where you don't know anything is wrong. And second,
like smoking, you know you have a habit but how badly do you
want to change?
It's been my experience over the past 35
years of watching small businesses come and go that the reasons
for failure are not what you would think. The two most common
reasons sited are:
1. Money runs out before the business can
pay for itself and
2. Poor management. Improper ordering,
growing too fast, bad decisions etc.
While the business graveyard is littered
with dead businesses that failed for those two reasons, the three
I will cover today are responsible for many more. Because of
these three reasons many don't even get the front door open.
Reason One: Forced Discipline
From the time we are born until our mid
twenties, we exist in a world of forced discipline. As children,
our parents tell us what to do. They make all decisions for us.
When we enter school, teachers control our lives. We had to go
to school because we were forced to. Was there one day in twelve
years that you told your parents you didn't want to go to school
that day. What did they say? "You have to go to school,
get ready, I'll drop you off." We were forced to clean up
our rooms or we couldn't go out and play with our friends.
Do your homework or no car. Bad grades,
"You're grounded for a month, Mister!" Even in extra
curricular activities you follow leaders and make very few decisions
on your own. You are literally forced through life. Think about
it. How many major life changing decisions did you make in the
first twelve years of your life? Not many huh!
When you leave school, move away from home
and get your first job how do you feel? Free at last, free at
last, Thank God Almighty, I'm free at last. Ha. You trade your
parents and teachers for a boss. Show up late too often, you're
fired. Miss too much work, you're fired. Want to go somewhere
with your friends, "Sorry, I can't go...gotta work."
And probably the worst indignity of all, the employee evaluation.
Someone in a position of authority passing judgment on your work
based on who knows what criteria. So how many years does this
go on?
One day you put your foot down and say,
"I'm mad as hell and I'm not gonna take it anymore!!"
I'm going to start my own business and BE MY OWN BOSS! Nobody
will ever tell me what to do again. Yeah, right.
OK, you start your own business. You walk
down the hall from the bedroom and presto you're at work. All
the decisions are now up to you. Are we going to work today?
Are we going to play golf?
All at once you go from a lifetime of forced
discipline to a few weeks of self discipline. What does self
discipline feel like? It feels very uncomfortable. You can't
pass the buck like you could at work. You suffer the full consequences
of your actions and decisions. Every decision about your business
rests squarely on your shoulders. One wrong move and you could
find yourself out of business.
So, what's the answer to combating and
handling discipline? First, recognize that you are going to have
to make some changes. You have gone through years of mind control
at the hands of others and now its a whole new ball game.
Its not what you think you are that's important.
It's what you think you're not. Because of the input by others
you have a perception of what kind of person you are. Usually
it's wrong. Start putting that lifetime of evaluations, passed
over promotions, and unappreciation behind you. It has no place
in your present situation. You must concentrate on the person
you really are not what someone else thinks you are, or were.
People change and so can you.
To start your rehabilitation process I
suggest you read, "The Magic Of Thinking Big" by David
J. Schwartz, Ph.D. and "Think and Grow Rich" by Napoleon
Hill. You should add these two books to your library today and
read them at least twice yearly during your first two years in
business.
Reason Two: Associations
There are many reasons people want to start
a business, but almost none start without some expectation of
success. They have done some "homework." Some haven't
done nearly enough but that's another story for another time.
Sooner or later the time comes and you
must tell someone about your plans to start your business. In
many cases the first to hear of your plans are your parents.
One of the really bad things about parents -- they try to protect
you from yourselves. Its a miracle you ever learned to walk with
them around trying to catch you before you fell. Why do we go
to our parents, and even worse, our friends for advice or approval?
Because we know them and again even worse we think they know
us and our capabilities.
If you wanted to become a pro golfer would
you ask a tennis player or a bowler for advice about how to do
it? You would probably start hanging around the golf course.
Remember your first day on the job? Didn't the boss put you with
someone to "show you the ropes."
Would you have told your boss, "Sorry,
my dad or my friend will be down to train me later. I'll wait
for him." Is that so ridiculous? What do your friends and
family know about your business. If your dad is a mechanic, and
you want to start your own car repair business, he is not qualified
to advise you unless he owns his own car repair business.
Do you think Bill Gates saw Microsoft as
it is now in the early 1980's? Probably not quite as big, but
he saw Microsoft as a major player in computers long before it
was. He directed it and made it happen because he saw it before
anyone else did.
His parents were disappointed when he dropped
out of school to pursue a computer career. His father hoped he
would be a lawyer. What if he had done what they wanted instead
of following his dream?
Spend your time talking to those who have
done what you want to do. Don't waste your time and energy with
anyone who is uninformed about your business or industry.
Reason Three: Vision For The Future
When I do seminars I always ask the audience
if they have children. I ask them to visualize their baby at
six months old crawling around the living room. How do they see
the baby at 30 years old? Still crawling around the floor in
diapers? Of course not. They see an educated person making a
valuable contribution to society.
During those thirty years, every decision
they make is made with the future of the baby in mind. Not where
the baby is at the time the decision is made but how the decision
will move the child toward the ultimate goal of a worthwhile
human being.
You must look at your business the same
way. Did Bill Gates see the future? He not only saw it ... he
made it happen.
Follow The Signs
As your business progresses, keep in mind
the final destination. A ship captain sailing from New York to
London can't see his destination for 99% of the trip. Set goals,
keep on course, and follow the signs. Don't avoid the town of
Failure. You have to pass through Failure on the way to Success.
Good Luck.
Would you like Tom Egelhoff
to speak on business failure prevention at your business function
or convention?
Click here for
information, topics and pricing.
This article may be reproduced
for your non-profit group or organization provided it is not
altered in any way
and the following is attached:
Used With Permission
©1998-2002 Eagle Marketing PO Box 271 Bozeman, MT 59771-0271
http://www.smalltownmarketing.com - (406) 585-0219
email: tommail@smalltownmarketing.com
Based in Bozeman, MT, Tom Egelhoff is
the author of How To Market, Advertise &
Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To
Say More And Spend Less. He is also a seminar
and workshop presenter and trainer. He may be reached at
888-550-6100 or PO Box 271 Bozeman, MT 59771-0271
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