Why Businesses Get Stuck And Struggle
There are so many things to do when you are the owner-manager of a small business, it’s inevitable that:
- There are many things you have to do right.
- Some can go wrong.
I’ve been running a readers poll on this website about the causes of why businesses struggle and get stuck.
I’d appreciate your vote too and you can see the results so far.
What Are The Main Reasons Small Businesses Get Stuck And Struggle?
Explaining The Internal Bias Of The Poll Questions
I wanted to concentrate on the things you could change within your business much more than worry about issues outside your business that you couldn’t change.
A rapidly declining marketing is a valid external reason for problems in the short term and can feel like a valid reason for the longer term.
However insolvency professionals find, when they look back at the causes of business failure, the fault inevitably lies with management.
That sounds harsh when you’re doing your best.
Finding yourself trapped in a declining market begs two questions:
- Why didn’t the owner-managers realise that the market was declining? Couldn’t they see that customer needs were changing or technology would make their products obsolete?
- Why didn’t they move into markets that were growing?
Can these changes happen very quickly and as a big surprise? Yes it is possible but it is unlikely. There are normally clues that alert managers can see provided they stop running around “doing it” and start thinking about the future success of the business in a structured way.
My Thoughts On The Results So Far
Last updated 1 June 2018
The joint leaders are:
- I don’t have control of the key numbers.
- Everything depends on me.
I expected both of these to be popular although perhaps not top.
The key numbers refers to your accounts, forecasts and other key performance indicators. Just as in sport, you know the score, a business should know how it’s performing on at least a monthly basis. It’s the only way for you to know whether you’re doing the right things and concentrating on the right tactics.
Sadly, feedback from both insolvency professionals and turnaround managers who try to turn a business around is that there are often significant weaknesses in these key numbers.
When you’re a one man band, it’s inevitable that everything depends on you, isn’t it? Perhaps not. You have the chance to outsource work to a part time bookkeeper, to a website designer etc.
More of a problem is when your business employees five, ten or twenty people and you still feel that everything depends on you. This points to weaknesses in how your people are asked to follow standard systems and processes, or perhaps deeper into how you recruit and manage your staff.
What seems obvious to you when you’re with a customer, doesn’t seem obvious to a 20 year old lad who’s mind is elsewhere.
In third place is I am unsure of how my business is unique in the customers’ eyes. I thought this would be higher. To demonstrate the point, let me encourage you to stop thinking about your customers and competitors and think about your suppliers.
Who gives you a unique reason to buy from them and stay loyal, who keeps your business out of inertia (common to banks and accountants) or who are the businesses you switch between, depending on the price of their latest offers?
I could go on, but they are all reasons why businesses can get stuck and start to struggle.
I’ve even included the fear of red tape. It’s given as a reason why many one man bands don’t want to employ another person. Suddenly the world of regular payrolls, employment law, health and safety, employers liability insurance etc open up.
Others don’t have a choice but to employ people because the business can’t function without others. Even so, they may despise every minute spent dealing with red tape to an extent that it saps away the enthusiasm for their businesses.
Another question I included is I have a long term health problem. That’s my own situation and it has taken years for me to come to terms with it, accepts what I can and can’t do and push on to focus on what I can.
Related to that is There is a serious issue with one of my family or very close friends. I hope you “work to live” rather than “live to work”. The long term ill health of a family member will inevitably impact on what you can do in the business and so too will separation and divorce from your husband or wife.
Paul Simister is a business coach who helps business owners who are stuck, get unstuck. If your business is based in the UK, you can have a free Business SOS consultation with me to help you get unstuck.