The 4th Biggest Cause of Business Failures

The 4th Biggest Cause of Business Failures

Entrepreneurs are an amazing breed: they’re smart, resourceful, flexible, and especially creative. They are great at many skills. The Internet makes how-to courses available for everyone so that we can pick up new skills faster and easier and cheaper than ever before. So it’s really easy to add new skills to our repertoire these days.

When you run a business there are a certain set of skills that you need to stay afloat:

  1. Product or service development so you have something to sell
  2. Project management and customer service skills so you can deliver on time
  3. Marketing and selling skills so you can get customers
  4. Bookkeeping and accounting so you can make a profit
  5. Human relations skill such as hiring and supervising
  6. Manufacturing and distribution if your business is not a service business or distributor/franchise
  7. Negotiation, legal, and contract knowledge

I’m sure you can think of more, and some of the skills vary by type of business. As you develop your business, you’ll need varying combinations of these skills as you move through certain phases of your business. A couple of questions to ask yourself:

1. What is my report card in each of these areas?

I suggest you take a minute right now and rank yourself on a scale of 1-10 (10 being perfect) how you are doing in each of the above areas. What is your personal skill level in each of the above levels?

2. What is my company’s overall report card in each of these areas?

Go through the seven functions above again and rank – in terms of implementation – how your company is doing in each area. This includes both you and your team’s talents together.

You will probably find some discrepancies among #1 and #2. For example, I am strong in project management because of all my time at Fortune 500 companies running $100 million projects. However, I was so burned out after I left my corporate job that I didn’t do a good job of practicing that skill in my own company. My mistake was not in not doing the skill (because I probably would have done it poorly), but was in not hiring someone to do it for me. I totally ignored it.

If you feel like you need some help in making an accurate assessment of your skills, here is a very objective approach:

For #1:Do I have raving testimonials from clients about what I do and lots of referrals?
For #2:Do I deliver what I say I’m going to on time and under budget? Are clients delighted with my service/ bedside manner?
For #3:Do you have all the customers you want and can handle?
For #4:Are both your revenue and net earnings growing nicely every year?
For #5:Are your employees and contractors thrilled to be on your project and working for you?

Your Biz Scorecard

In this market, it’s critical that you tighten up any leaks. Check your report card and see where your company’s weakest areas are. If you’re not sure, get a coach to help you make an objective assessment.

Since 70 percent of businesses suffer from a skill weakness, it’s highly likely you have identified an area you could improve on. That’s the first step in strengthening your business and making it fail-proof. The next step is getting the right help in shoring up the skill.

Let us know how we can help you take your skills and your business to the next level.

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