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Why do Businesses Fail?

The short answer is businesses don’t fail, the business owners fail. Most business owners probably do not like that answer but the truth does hurt and no one said it would be easy, there are many reasons though why a business fails so I am going to number the reasons to help me stay organized and on point.Why Do Businesses Fail -

1. The business may be top heavy, to many chiefs and not enough indians per say. I see this alot in older businesses as they are afraid of trimming the fat, but in many cases this is what needs to get done especially if the company has not changed the way they do business and has stayed with the old tried and true per say. I have to say though it would not matter if you had alot of chiefs if they were actually being productive and made changes within the company as the economy would indicate but in so many cases they are so out of touch with their consumer base they complete miss the window of change. One company was Toy’s R Us, they missed the window of change and what happened? The thing is we have seen this alot over the years and will continue to see this as the past is the future, nothing changes except the date.

Small Business Failures

2. Small Business Failures just like big business just on a smaller scale fail for the same reason, owners either overspend, are out of touch with changes in the business or are not willing to change. This is one reason many banks will not loan to small businesses and for that matter independent businesses. For this reason many people opt to join a chain or franchise as apposed to starting a business of their own so they can get a bank loan.

Your Business or Your Job

Let me move off topic for a minute, many people who go into business get into business because they think because they were successful working for a company they will be successful on their own, what they are missing is that they are only one cog in the machine when with a company but when you work for yourself you are the business, success or failure it is all on you and because of you. This is why if you start a business you need to have a good understanding of all facets of the business, Why? So when you hire someone to do a job you no if they are doing their job. People that have been in business a while are driven people, the chances of finding someone that is driven like you is pretty much impossible. Personally in my business I am happy if I can get someone to show up, which is why for myself I choose to remain a very small business. Years ago I had multiple properties with almost 30 people working for me but for me I realized it was more work making sure that the work was getting done that it was worth to me so I decided to remain a single property where I enjoy working that multiple properties where it was work.

One Business or Multiple Businesses

Now as a one property business I still have to keep in touch with changes and I am able to adjust my business quickly which is the main reason I have been in business for over 38 years and counting. I started my internet business as a way to flow into retirement per say and over the years when I put alot of effort in the online business I can make good money, when I want to slow down a bit I can and that is what I like about being self employed.

With all of my business experience where I have experienced about everything related to business I do not have to go to a book to answer a question, I have a wealth of knowledge on about every topic to or related to business.

I remember about 20 years ago a couple stayed at our motel that was starting a restaurant business in New Concord, Ohio. The two never had a business but thought they would like to run their own restaurant in a small town so they lease a property in town, with in a couple days they started telling me how to run my motel which I found odd since they had never been in business and I had been here for almost 20 years. This continued over the next to weeks with their training on how to run a business when I finally asked them, do you really think you know more about running a motel than I do since everytime we talk you are always telling me what I am doing wrong. Well they both had business experience working for other people not themselves, I asked them why they chose a restaurant business for retirement to which the wife said I have always like cooking. Within a year they were out of business, lost everything. The morel of this story is until you walk in my shoes you cannot where them.

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June 16, 2018