Blog

Success Needs Sufficient Capital Resources
To succeed in business, you need sufficient capital resources. In fact, it is said that the number one source of failure for small business is running out of money.

If you do not have a realistic assessment of the money that is needed to implement your business plan, you run the risk of running out of money. If you run out of money, your business may likely fail. Failure to have a realistic understanding of the amount of money that is required for the business overall and to implement certain new ventures, particularly, can lead to ruin.

Failing to have adequate money for the business can be a mistake.

30 Retaining the Wrong Professional Advisor

From time to time companies and senior executives inevitably are involved in circumstances that are not familiar to them. In those circumstances, it is a good idea to retain a professional advisor. But it can be disastrous if the wrong advisor is retained.

Often the decision about the advisor who is retained is much more controlling in determining the outcome that is achieved than are the merits of the strategy pursued, the potential of the new business opportunity, what diligence is employed, or how much resources are expended. If you retain the wrong advisor, you may end up with an unfortunate outcome.

Retaining the wrong advisor is a mistake.

20 Exploit the Employee

Some companies operate with an exploit the employee approach.

Some companies reason that employees are out to take advantage of them, so the company should get everything it can from the employee. A company may figure that it is paying the employee good money and that therefore nothing more is due or expected. If the employee doesn’t like it, the employee can go somewhere else. After all, there are many other people the company could hire. But will an exploit the employee approach attract and keep the best employees?

Exploiting the employee can be a mistake.

11 Promoting Traffic at the Expense of Profitability 

Seeking to establish themselves in a new market, some companies may emphasize customer traffic—to the exclusion of whether they make any money on those so-called customers.

As Peter Drucker has observed, it is a fundamental business truth that the purpose of business is to create and retain a customer. But if you do not make any money on your customers, you do not have a business. Generating traffic without revenue and profitable customer transactions is a sure way to financial ruin. This lesson was relearned by many dot-com technology companies in the 1990s, who promoted traffic to their websites but failed to establish a viable business model. Numerous dot-com companies that failed did not sufficiently understand that, at the end of the day, maximizing hits is much less important than generating revenues in amounts more than the expenses incurred in
achieving those revenues, so that the business can make a profit and sustain itself.

Promoting customer traffic at the expense of good business is a mistake. 

1 Failing to Employ a Structured Decision Process
Decisions made without a structured, systematic process may be less than optimal.

Business school courses, academic textbooks, and training programs concerning decision making provide structured approaches, decision models, and tips to make better decisions. The classic approach involves defining the problem, identifying alternatives, undertaking quantitative analyses and qualitative assessments, exploring the risks, and then choosing the best course of action. While a structured decision making process is central to management, too often that approach is ignored.

Failing to employ a structured decision process can be a mistake.

1 Indecisiveness
All too many companies are plagued by indecisiveness.

Indecisiveness actually reflects the decision not to make a decision. Not making a decision means embracing the status quo and rejecting the choices of what could be available, were a decision to be made. The advantages of making a decision, even if it is the wrong decision, is that one can gain feedback from the consequences of the decision and make adjustments as appropriate. But if you never make a decision you never have a chance to see what might happen and to incorporate that information into a future choice.

Indecisiveness is a mistake.

1 Lack of Vision
Some enterprises operate without a vision.

Lack of vision may reflect a nose-to-the-grindstone approach to business. The
involvement in the here and now is so intense, so all-consuming, that larger possibilities
are given little thought. The company figuratively keeps putting one step in front of
another, without consideration of what might be possible or desirable. Without a vision,
what might be accomplished with a vision is unlikely to be accomplished.

Lack of a vision is mistake.

Values

1- Values Lacking in Commitment
Some companies develop a statement of values because the management textbooks say that companies should have a values statement.

But a values statement that is prepared for appearance rather than substance is not especially valuable. Values that reflect articulation of a commitment to higher purposes are much more impactful than those that reflect a going-through-the-motions approach. Empty values are not nearly as valuable as values that are anchored in commitments.

A values statement for appearance’s sake rather than to reflect commitments is a mistake.

1 Strategic Incongruency

Strategy, to be effective, must be congruent.

If balance and consistency between different parts of the business strategy are lacking, the resulting incongruence compromises the prospects of business success. Strategy congruency means that there is a reasonable connection between one part of a strategy and another part of a strategy. The purposes of one part of the enterprise are complementary to those of another part of the enterprise. The goals of one division are supportive of, and in parallel with, the goals of another division. 

1 No Plan

A surprising number of companies operate with no plan.

If you operate with no plan, you are proceeding in reliance on spontaneous, reactive, and even impromptu action—rather than on the basis of deliberate, considered approaches to the business. If what is to be done is not much thought about in advance, the opportunity for reflection, consideration and choosing the best way is quite limited. Without a plan, the benefits of plans—focus on priorities, assignment of responsibilities, accountability for results—cannot be realized. Enterprises with plans achieve greater and more frequent success than those that lack them. For as it has insightfully been said, failing to plan is planning to fail.

Not having a plan is a mistake.