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Why Businesses Fail, Part 2: Know Yourself
Small business owners and managers may not have the six-figure incomes, paneled offices and private jets of corporate executives but they have the same responsibility—leadership.
Top managers do not spring into existence out of nowhere.
They are selected because they are suited for the job, and they are carefully groomed through extensive training and a highly structured career path. They don't just wake up one morning and find themselves in charge.Small business owners, on the other hand, often do, and many of them are ill-equipped for it.
It is critical that a person who is thinking about starting a business find out how well she fits the leadership role she will have to assume. Corporations use tools to evaluate candidates for management, and small business owners should do the same.
Why Businesses Fail, Part 1: Know Your Market
Ask small business owners why some of them fail and they'll tell you it's because they don't make enough money. This makes about as much sense as saying that Enron went under because the price of its stock fell.
It begs the question, why don't they make enough money, and misses the opportunity to seek out fundamental causes like:
- Financial projections based on wishful thinking rather than real numbers and actual market conditions.
- Failure to articulate and communicate the value of a product or service.
- Inadequate professional development of the owner or manager
