Why do businesses fail?

To misquote Tolstoy: “Successful business are all alike; every unsuccessful business is unsuccessful in its own way.”

This has been a recurring thought for me as I’ve watched the latest series of The Fixer with Alex Polizzi. She is focusing on family businesses – which is an additional stress factor in these cases – but each week it is the same things that are being done wrong contributing to the imminent failure of the business. They are just being done wrong in a different way.

But these businesses do have one very clear factor in common: the owners are good at what they do. Sadly, that isn’t enough to ensure their success. If you want to thrive in the 21st century, you need to understand how to structure and run your business so that it supports what you do, you feel in control, you are confident that there aren’t ’nasty surprises’ lurking and you have time to concentrate on customers and growth.

So what makes the difference between a business that is successful and one that isn’t, if the owners are experts at what they do but they don’t have any experience or knowledge of how to manage their business to best effect?

The simple answer is that those business owners ‘don’t know what they don’t know’, but some of them recognize that fact and, as importantly, that there are people who do know. In short, they ask for help.

In the case of the firms in the TV series the owners have not only not recognized that they need help, but they also actively resist it when given. If you know how business works, it is immediately clear what their problems are and what are the solutions in all their situations. What makes this good TV is that these are businesses on the brink, their problems are long-established, and the owners don’t take advice kindly or easily.

It helps that the programme has a seemingly unlimited budget and access to top consultants, but each one of those businesses could have avoided their situations if they had asked for help a lot sooner.

This just leaves us with another question: Can any business be brought back from the edge of collapse or should some just be left to die? Well that’s a subject for another blog, but if you have a view – please leave a comment.

Susie Collings helps make businesses run better – to have higher profit margins, retain their clients and staff, win new business, easily adapt to change and grow sustainably.

If you would like to discuss any of the points raised please call on 0118 380 0545 or email info@exilia.co.uk

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