7 Major Areas Where a Business Fails

Guest Blog Post by Hank Moore 2/8/12

1. The business you’re in. Not in the right business for well thought out reasons. Don’t have a clearly unique product, rather an idea that isn’t fully developed. Overdependence upon one product or service line. Diversifying beyond the scope of company expertise.

2. Running the business. Poor controls, location, equipment, administrative support. Not properly trained or equipped to handle rapid influxes of business. Production, deliverability strained already…and it gets worse. Mis-use of company resources, notably people.

3. Financial. Undercapitalized. Unprofitable pricing. Poor payables-receivables policies. Lack of accountability. Excess overhead. Too much emphasis upon getting rich, rather than steadily growing and improving. Reliance only upon “bean counters” for company direction.

4. People. Insufficient investment in people on the front end, as the organization evolves and during rapid growth. Employees are not empowered to make decisions or take risks. Isolated or unrealistic management, possessing limited leadership development and people skills.

5. Business Development. Overall marketplace naivete. Unrealistic sales policies, quotas and sales management. Unsuccessful marketing. Customer service is not good, doesn’t improve and never is a major emphasis for the company. Marketing is more for ego reasons, rather than a careful strategy. Sales and marketing are not given enough support…especially management’s personal participation. Lack of understanding about protecting existing business, entering new markets, new product development or collaborations.

6. Body of Knowledge. Failure to change. Inability to read the warning signs or understand external influences. Regulatory red tape. Management doesn’t take the time to understand how the company has grown or analyze the relationship of each branch to the other. Setting themselves up to avoid change…failing to grow without a crafted-shared Vision.

7. The Big Picture. Failure to understand what business they’re really in. Inability to plan strategically. Lack of an articulated, well-implemented vision. Business will not evolve because no Big Picture ever existed. Cannot truly grow without a crafted Vision for the future.
Hank Moore, Futurist and Corporate Strategist™, is the highest level of business expert and discusses topics that one can only cover from having advised them over a long career, covered in “The Business Tree” and other best selling books.