Why Small Businesses Fail by Biz Coach C


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Why do most small buinesses fail??
Ideas for your business to suceed and grow.

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Why Small Businesses Fail by Biz Coach C

  1. 1. Why Small Business Fail and The Business Secrets I Have Learned Biz Coach Plus Duane Hoversten [email_address] 320-282-1677 Biz Coach Plus Biz Coach Plus
  2. 2. Business Costs Small business faces a gauntlet of obstacles. For details on reprint usage or to purchase original art or prints, Email Pritchett Business Cartoons | Site Map | Home Page | Search © John Pritchett Biz Coach Plus
  3. 3. The Existing Landscape Biz Coach Plus
  4. 4. Credit to Others <ul><ul><ul><li>Emyth Revisited by Micheal Gerber </li></ul></ul></ul>Biz Coach Plus
  5. 5. Failure of Businesses 50% of New Businesses don’t last 18 months 70% of New Businesses don’t last 5 years Most Small Business NEVER reach their Potential!!! Why?? We will tell you…. Biz Coach Plus
  6. 6. Realty The business is a direct reflection of the owner.. <ul><li>If your thinking is sloppy - your business will be sloppy </li></ul><ul><li>If you are disorganized, your business will be disorganized. </li></ul><ul><li>If you are greedy, your employees will be greedy. </li></ul><ul><li>If you lack direction on how to improve your company, your company will not improve </li></ul><ul><li>If you are not accountable, no one in the company will be </li></ul>Biz Coach Plus
  7. 7. Small Business Owners <ul><li>1. Owners work very hard for their Money they earn </li></ul><ul><li>2. Most owners are not doing the right work in their Companies </li></ul><ul><li>3. Small Businesses have Unpredictability and High Frustration </li></ul><ul><li>4. Information abounds – Yet it is not Utilized. </li></ul><ul><li>5. Most Small Businesses could make a lot more money </li></ul>Biz Coach Plus
  8. 8. Most Small Businesses Fail to Maximize their Business and Many Even Fail!! I am going to tell you how to fix these Businesses. Insight into Small Business Biz Coach Plus
  9. 9. Fatal Assumption <ul><li>If I understand the technical work of a business, I understand the business that does technical work. </li></ul><ul><li>If I am an Electrician, I can run an electrical business. </li></ul>Biz Coach Plus
  10. 10. E Myth Model (Concept by Michael Gerber) <ul><ul><li>Look at the business itself as a product competing with other businesses. </li></ul></ul><ul><ul><li>Do NOT look at what’s done in the business but HOW it is done. </li></ul></ul><ul><ul><li>Biz Coach Plus- Create Accountability for the Owner </li></ul></ul>McDonald’s Domino’s Biz Coach Plus
  11. 11. Secret #1 <ul><li>Owners are typically not doing the right work in their business!! </li></ul>Biz Coach Plus
  12. 12. E Myth Personalities (Emyth by Michael Gerber) <ul><li>You have heard that small business owners need to wear many hats – BUT seldom do they!!! </li></ul>The best personality does not always surface and win . Biz Coach Plus
  13. 13. The Technician <ul><li>Is a doer </li></ul><ul><li>If you want it done right, do it yourself </li></ul><ul><li>Happiest when working </li></ul><ul><li>Knows you can’t do two things at once </li></ul><ul><li>Likes to control flow of work </li></ul><ul><li>Thinking isn’t work…. And is unproductive </li></ul>Biz Coach Plus
  14. 14. The Entrepreneur (Leader-Visionary) <ul><li>Turns trivial conditions into opportunities </li></ul><ul><li>The Dreamer and Catalyst for Change </li></ul><ul><li>Needs control </li></ul><ul><li>Lives in the world of “what if” and “if when” </li></ul><ul><li>Creates Havoc because of need for change </li></ul><ul><li>People are problems that get in the way of his dream </li></ul>Biz Coach Plus
  15. 15. The Manager <ul><li>Pragmatic </li></ul><ul><li>Craves order </li></ul><ul><li>Clings to status quo </li></ul><ul><li>Sees problems not opportunities </li></ul><ul><li>Creates neat rows of widgets that entrepreneur creates </li></ul><ul><li>Cleans up Entrepreneur’s Mess </li></ul>Biz Coach Plus
  16. 16. Secret #2 <ul><li>Owners work in their Business and Hardly Ever work On their Business </li></ul><ul><li>They must have a Strategic plan!! </li></ul>Biz Coach Plus
  17. 17. Set Strategic Areas for Your Busines <ul><li>1. Organizational Strategy </li></ul><ul><li>2. Management Strategy </li></ul><ul><li>3. People Strategy </li></ul><ul><li>4. Marketing Strategy </li></ul><ul><li>5. Operations Strategy </li></ul>Business Plan with emphasis on Strategies and Systems... AND Accountability Biz Coach Plus
  18. 18. Secret #3- Owners Don’t Manage or Lead Owner/Manager must act in the business as he wants his/her people to act. “ Walk the Talk” Many Owners are Controlling.. Some Simply Abdicate Management.. Biz Coach Plus
  19. 19. What should a do to Manage? 7 Focus Area of Managment 1. Goal Setting – daily – weekly – monthly- yearly 2. Leadership - daily 3. Money Management – daily (invoicing – AR) 4. Marketing Direction and Follow up 5. HR Oversight 6. Operations Systems Oversight 7. Networking – Customers – Vendors - Community Biz Coach Plus
  20. 20. Secret #4 – Need for Systems <ul><li>There are few written Systems in the Business. Thus there is chaos or </li></ul><ul><li>simply lost time waiting for the owner to direct activity. </li></ul><ul><li>Especially Financial Systems!!!! </li></ul>Biz Coach Plus
  21. 21. Business Format Franchise <ul><li>“ Proprietary Way of Doing Business that differentiates every Extra-ordinary business from one of its competitors.” </li></ul><ul><li>How do we build businesses to make that idea work for us? </li></ul><ul><li>How do we make businesses work that works predictably and profitably every day? </li></ul><ul><li>How do we get business owners in control of their business rather than the businesses controlling the owner/manager??? </li></ul>MAJOR QUESTIONS ARE: Biz Coach Plus
  22. 22. Create Systems for every Part of Your Business… to make Your Business Turnkey <ul><li>The Franchise Phenomena </li></ul><ul><li>McDonalds - The most successful small Business in the world. </li></ul>Biz Coach Plus
  23. 23. The Business Model <ul><li>The model must be consistent and create a consistent Value to Customers, Vendors, and Employees, and other stake holders. </li></ul><ul><li>The model will be operated by people of the lowest skill possible </li></ul><ul><li>The model will stand out as a place of order </li></ul><ul><li>All work will be documented by operation manuals </li></ul><ul><li>The model will provide uniform customer service </li></ul>Biz Coach Plus
  24. 24. Business Systems/Procedures-1 <ul><li>Financial </li></ul><ul><ul><li>100 Billing Systems & Collections </li></ul></ul><ul><ul><li>110 Budgeting System </li></ul></ul><ul><ul><li>120 Cash Flow Measurement </li></ul></ul><ul><ul><li>130 Financial Statements </li></ul></ul><ul><ul><li>140 Inventory Control System </li></ul></ul><ul><ul><li>150 Pricing System </li></ul></ul><ul><ul><li>170 Purchasing System </li></ul></ul><ul><ul><li>180 Tax Preparation </li></ul></ul><ul><ul><li>190 Vendor Selection </li></ul></ul>Biz Coach Plus
  25. 25. Business Area & Systems Worksheet <ul><li>Business Areas and Systems Work Sheet </li></ul><ul><li>Business Area:___________________________System:___________________________ </li></ul><ul><li>Procedures/Activity: </li></ul><ul><li>1.___________________________________________________________ </li></ul><ul><li>Who:________________________________________________________ </li></ul><ul><li>When:_______________________________________________________ </li></ul><ul><li>Where:______________________________________________________ </li></ul><ul><li>Why:________________________________________________________ </li></ul><ul><li>What:_______________________________________________________ </li></ul><ul><li>_______________________________________________________ </li></ul><ul><li>_______________________________________________________ </li></ul>Biz Coach Plus
  26. 26. Secret #5 – Get your Business to a Mature Stage <ul><li>Infancy </li></ul><ul><li>Adolescent </li></ul><ul><li>Mature </li></ul><ul><li>We’ll Talk about </li></ul><ul><li>each Stage </li></ul>Biz Coach Plus
  27. 27. Infancy stage of Business <ul><li>Technician Stage of Business </li></ul><ul><li>Worked 10-15 hours a day </li></ul><ul><li>Work came hot and heavy. </li></ul><ul><li>Worked each day on who screamed </li></ul><ul><li> loudest. </li></ul><ul><li>Always behind </li></ul><ul><li>Not enough time to bill - Vendors calling for pay </li></ul><ul><li>House hold has no money - </li></ul><ul><li>Spouses fighting and talking of divorce </li></ul>Biz Coach Plus
  28. 28. Adolescence Stage <ul><li>Stage where business has to get help </li></ul><ul><ul><li>Company hires employees but owner still works and doesn’t transition to management </li></ul></ul><ul><ul><li>More bills and payroll!! </li></ul></ul><ul><ul><li>More yelling … </li></ul></ul><ul><ul><li>Problems got worse not better... </li></ul></ul>Biz Coach Plus
  29. 29. <ul><li>Companies who: </li></ul><ul><li>Have Systems in Place </li></ul><ul><li>Are Pro Active!! </li></ul><ul><li>Have the Right People doing the Right Things </li></ul><ul><li>Are Turnkey </li></ul>Maturity Stage Biz Coach Plus
  30. 30. Introduce Wayne <ul><li>Real Person </li></ul><ul><li>Landscaping Business </li></ul><ul><li>Not making much money </li></ul><ul><li>Two Years behind with Tax Returns </li></ul><ul><li>No Records – Just a Shoe Box </li></ul><ul><li>Wore out from the Grind </li></ul><ul><li>Ready to Quit </li></ul>Biz Coach Plus
  31. 31. We Created a Turn key Business for Wayne <ul><li>Created goals </li></ul><ul><li>Created Work orders to start jobs </li></ul><ul><li>Created Paperwork to track work on jobs </li></ul><ul><li>Enter into Job Costing on Peachtree </li></ul><ul><li>Employee Manual </li></ul><ul><li>Created Organization Structure </li></ul><ul><li>Hired a bookkeeper </li></ul><ul><li>Created schedules </li></ul><ul><li>Did last two years taxes </li></ul>Biz Coach Plus
  32. 32. Wayne now Believes!!! <ul><li>Runs the Business – not the Business running him. </li></ul><ul><li>Has upped his net worth 3 times in two years. </li></ul><ul><li>His a High 6 figure Personal/Company Income </li></ul>Biz Coach Plus
  33. 33. Secret #6 Your Business in Not Your Life!!! <ul><li>A Business Owner must understand that the primary purpose of a business is that it serve him/her not that he/she serves the business. </li></ul>Work on the Business Not in the Business.. Biz Coach Plus
  34. 34. Secret #6 Goal Setting Daily Weekly and Monthly and Yearly are Critical.. Measurement of Success is not Possible without Goals. Do this with Strategically – Strategies – Goals - Tasks Biz Coach Plus
  35. 35. Secret #7- Accountability You Need a Mentor, Mentor Network and Education.. 1. For Accountability 2. For Bouncing Ideas 3. For Creating a Sound 4. Sound Footing for your Ideas Biz Coach Plus
  36. 36. Work on Your Business Find a Mentor or Coach. <ul><li>Your job(as owner) is to prepare yourself and your business for growth. </li></ul><ul><li>Work on your business as if you had 5,000 others exactly like it. </li></ul><ul><li>Treat your business as the product. </li></ul><ul><li>Create expert systems to run the business. </li></ul><ul><li>Train people to run the systems </li></ul>Biz Coach Plus
  37. 37. Secret #8- Get in the Right Business <ul><li>If you are doing what you did 10 years ago.. Its probably Wrong!! </li></ul><ul><li>Must have a Business that will attract Customers from 100 Plus Miles Away </li></ul>Biz Coach Plus
  38. 38. Look at the Facts <ul><li>Understand our Business Environment </li></ul><ul><li>Do some Basic Thinking/Research </li></ul><ul><li>Example: Scrapbooking </li></ul><ul><ul><li>Town of 700 people and draw of another 500 =1200 </li></ul></ul><ul><ul><li>½ are women – leaves 600 potential customer </li></ul></ul><ul><ul><li>Competing with 2 other Larger Cities –Cuts base to 200 </li></ul></ul><ul><ul><li>Only 30% of women do Scrapbooking – 60 Customers </li></ul></ul><ul><ul><li>Average Scrap booker does $200 year – total of $12,000 in base sales </li></ul></ul>Biz Coach Plus
  39. 39. Secret #8 – Be Customer Focused <ul><li>The customer is the only person qualified to specify what their needs, what features are required of our products/services, how do customers rate our products/services versus our competitors and how can we keep our customers satisfied? </li></ul><ul><li>Posted By: iSixSigma </li></ul>Biz Coach Plus
  40. 40. Secret #9 -Be Part of a Networking Group… <ul><li>What is the biggest problem in your Businesses??? </li></ul><ul><li>We will try a </li></ul><ul><li>Networking group </li></ul><ul><li>Later in our </li></ul><ul><li>Meeting.. </li></ul>Biz Coach Plus
  41. 41. Secret #10 – Market Your Business Every Day!! What is the best Marketing for your Business? – Word of Mouth Use at Least 3 Tools for Marketing. 1. Web site 2. Newspaper 3. Referral Program 4. Signs on Vehicles Biz Coach Plus
  42. 42. Summary <ul><li>What can you do today????? </li></ul><ul><li>Buy Books </li></ul><ul><ul><li>Emyth Revisited by Michael Gerber </li></ul></ul><ul><ul><li>Rich Dad Poor Dad by Robert T. Kiyosaki </li></ul></ul><ul><ul><li>Built to Last by Jim Collins and Jerry Porras </li></ul></ul><ul><li>Set Goals Strategically!! </li></ul><ul><li>Setup Systems in Your Business </li></ul><ul><li>Join a Business Networking Group </li></ul><ul><li>Get Marketing </li></ul><ul><li>Get Coach for Accountability </li></ul>Biz Coach Plus
  43. 43. Followup <ul><li>Want Group Networking from Biz Coach Plus? </li></ul><ul><li>Want Coaching from Biz Coach Plus?? </li></ul><ul><li>Want a Strategic Plan Set Up?? </li></ul><ul><li>Want a Business Evaluation?? </li></ul><ul><li>Biz Coach Plus </li></ul><ul><ul><li>Phone: 320-282-1677 </li></ul></ul><ul><ul><li>Email: [email_address] </li></ul></ul><ul><ul><li>Website: www.BizCoachPlus.com </li></ul></ul>Biz Coach Plus