Why Do Businesses Fail?

Some fail through no fault of their own.

Some are just wrecked by lack of attention/insight, wrong people, wrong product (or service) or wrong/lack of process. 

So let’s talk about the 3 elements you can do right. 

  1. Product
  2. People  
  3. Process 

Already there’s a conflict. Because I – and possibly my sister who is arguably the most successful HR director in the UK – would say that people should be #1. 

And when you consider they make up 2/3rd of the people equation required in any successful business it’s hard not to agree. 

But I’m going to put Product first. 

Because before you do anything else, you must ensure you have a viable business model. And…

You have a product or service that does what it says on the tin and which people want or need and are willing to pay for. 

I think that’s enough. You all know what I mean by ‘does exactly what it says on the tin’. Some of you may even remember the brand and the adverts (answers in comments if you do, no prizes, just kudos) 

Ideally, your product or service is ‘best in class’- if it isn’t, fix it. 

Stress test it, review it, improve it, do whatever the hell you need to do to make it the best available. Make your ideal clients’ buying decision a no-brainer. 

Can you imagine how easy your marketing will be if/when you know you have the best product or service available on the market? 

And you can prove it? 

(Don’t worry, I’m going to write more on this in the coming weeks, haven’t got the space to cover it here. So make sure you get Marketing Advice, my newsletter delivered straight to your inbox every weekday)

So you have the product or service. 

Let’s move on to #2 

      People. 

People make a business. Or a company if you prefer, must be why the British Army use this term to describe a group of men & women

Anyway, the quality of those people determine how successful the business becomes, to a large extent. Experience, knowledge, skill, business acumen, tenacity, ability to look ahead and be innovative, team work, physical and mental health. 

I’m sure there are others you can think of but those are definitely pre-requisite in my opinion. 

This is why it pays to invest – literally – in your team. 

Initially – in recruiting and welcoming them into the fold – and ongoing, providing opportunities to add to their skillset, encouraging them, training them, empowering them and making them feel included and valued. 

This investment, as I’m sure many of you will recognise, will reap dividends for you and your business and not just in the literal sense. 

When you tot up the cost of recruiting – time taken to write the ad, ad placement costs, agency costs if you use them, interview time (x2, x3 +) background checks, review, job offer, training & induction…

That’s a hell of a lot of money. 

With no guarantee it will all work out and you get a loyal, productive and contributing member of your team. 

There are so many rabbit holes we could explore on the recruiting process alone but that’s not really the focus of my post today so let’s move on…

So we now have the people sorted yes? Er no, not quite. 

Like I mentioned earlier, there is a 3 part equation when it comes to the people involved in a successful business. 

Let’s meet the other 2 parts…

Your suppliers/partners 

Your ideal clients

It is equally important that you choose your suppliers and partners well. 

(By suppliers I’m not referring to who you buy your printers from, I’m sure you can organise commodities without my tuppence worth) 

If you’re an insurance broker for example and you choose to be part of a network rather than directly authorised, surely it’s imperative that you choose one that shares your values, culture and aims

That allows you to grow your business and choose the type of business you want to attract. I would say that’s absolutely key.

What if you’re directly authorised? 

The same applies, you want to work with Insurers that share your vision, that actually want the business you’re chasing. Or you could flip the dynamic and chase the business THEY want, assuring all 3 parties of a WIN.

The same could be said for financial planners or mortgage brokers or accountants. Choose your external business partners well, make sure their offer aligns with your ethics, culture and aims. 

The final third of the people equation is your ideal client. 

Has the phrase ‘last but not least’ ever been more appropriate? 

And again, it’s tricky to know where to place your ideal client because without them, you have no business. So should I have put them in at #2 after your product/service? 

I think the best way is to agree that all 3 elements – Product, People and Process are equally important to a business’ success.  

Let’s look at your ideal client for a moment. (Again, I’m going to drill down deeper on this subject so don’t miss out on Marketing Advice

In your current business, are you helping the people you really want? The term is ‘ideal’ client after all. 

Are they really your ideal client? 

Are you using your skills, knowledge and experience to help the people you really want as clients? Is your business optimised to serve these people? 

Don’t waste time trying to help people you have no heed in. 

Businesses talk a lot about being ‘passionate’ about what they do 

In most cases, that is a crock of shit. 

It sounds false and your ideal client can smell it a mile off. 

But you do need to care about what you do and who you do it for.

Otherwise it will show, and your business will fail. Why waste your energy and your money? 

Choose your ideal client carefully. Take time to craft your ICA – Ideal Client Avatar. This is a composite of your ideal client(s)

Enough said. Lets assume you have this wrapped. 

Next up – and the final element – is 

 Process  

When I talk about process, I actually mean systems. 

Every successful business in the world has perfected and continues to perfect, bomb-proof systems designed to ensure their ideal client gets their product or service delivered as quickly and efficiently as reasonably possible. 

Front of house and back office. They automate their systems as much as possible. And where they can’t, they train their teams to play their part, and how those parts ensure the system works. 

Of course, we don’t live in a perfect world. Shock horror

Computers crash, machines break and humans get ill, have accidents and sometimes just can’t be arsed to get up for work

Which is why successful businesses have contingency plans to support their systems because their clients don’t care if your software has gone crazy, your printer has caught fire or your star employee has gone berserk with a giant marrow, 

That’s why you ensure your 3 elements are in place. 

Product, People & Process. 

You can’t fail. Or at least, you certainly increase your odds of not failing…

Right, that’s 1197 words, time for a walk…

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