Top 6 Landmines for Businesses
By George Marcou
Most businesses that go under do so for more or less exactly the same set of reasons.
Woolworths, Leman Brothers, Allders, Comet, Blockbuster, Oddbins, Threshers, Julian Graves, Acquascutum and tens of thousands of other businesses of varying sizes have gone under in the last few years, for more or less the same standard set of reasons.
Every business that we are invited to help have at least one of these issues preventing them from flourishing. These can sit dormant for a while just under the radar to be classed as not worth prioritising. Often these issues are ignored because they are not causing a sufficiently urgent crisis to warrant solving the root causes.
The problem with this approach is that these are the types of issues that change from being a minor problem to become a full-blown crisis very quickly.
Once they become a crisis, it is very difficult to get them back to just being a problem. They become life-threatening for a business in the same way that a heart attack is life threatening for business owners.
How many doctors do you know that specialise in businesses? Where are the heart surgeons for companies?
Right, so the fatality rate is much higher for business heart-attacks than for people, as shown by the huge rate of recorded business failures.
Prevention is always better than cure when it comes to serious health issues. This is why we are trying to eat a healthy diet, take more exercise and visit the doctor more than in the past.
What are the causes for businesses?
1. Failure to keep up with costs
2. Loss of market
3. Difficulty obtaining the required credit / finance
4. Over-expansion
5. Tax Problems & burdens
6. Internal Issues including management failures.
* Loss of market as a primary cause of failure became more common the longer a company has traded
** ‘Other management failure’ was a more common primary cause of failure amongst companies that traded for less than 2 years and as the trading period increased, fewer failures were attributed to this cause.
Each of these areas contains many specific problems.
Internal Issues covers a host of problems that almost all businesses face. Some of these seem to have no obvious solution and are ignored, but when they reach crisis point, they can and do sink businesses.