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Top 5 Reasons Businesses Fail Presentation

Date post: 18-Jan-2015
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This is a presentation I did to a group in Norman, OK - I shared the five biggest reasons for business failure and ways to avoid it.
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and how you can prevent it from happening to your business! The Top 5 Reasons Businesses Fail
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Page 1: Top 5 Reasons Businesses Fail Presentation

and how you can prevent it from happening to your business!

The Top 5 ReasonsBusinesses Fail

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Agenda

Failure IS an Option1

The Mess We Find Ourselves In2

The Top 5 Reasons Businesses Fail3

7 Steps to Standing Out4

5 Wrap Up

www.OneSOURCEOK.com

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Who would have thought…

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…would have failed?

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Small Business: America’s Engine

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The Impact on the Economy

Employ just over half of the country’s private sector workforce

Hire 40% of high tech workers, such as scientists, engineers and computer workers

Include 52% home-based businesses and two percent franchises

Represent 97.3% of all the exporters of goods

Represent 99.7% of all employer firms

Generate a majority of the innovations that come from US companies

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Small Business Survival

In 2008… There were 627,200 new businesses

595,600 business closures

43,546 bankruptcies

69% of new businesses born in 2000 survived at least two years

51% of similar businesses survived five or more years

Source: U.S. Department of Commerce and the Small Business Administration

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AND HOW TO AVOID IT

Why Businesses Fail

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Reason #1: Poor Customer Service

June 21, 2005

Dell lies. Dell sucks

I just got a new Dell laptop and paid a fortune for the four-year, in-home service.

The machine is a lemon and the service is a lie.

I'm having all kinds of trouble with the hardware: overheats, network doesn't work, maxes out on CPU usage. It's a lemon.

But what really irks me is that they say if they sent someone to my home -- which I paid for -- he wouldn't have the parts, so I might as well just send the machine in and lose it for 7-10 days -- plus the time going through this crap. So I have this new machine and paid for them to ******* FIX IT IN MY HOUSE and they don't and I lose it for two weeks.

DELL SUCKS. DELL LIES. Put that in your Google and smoke it, Dell.

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What did Dell do to fix this? Increased service spending 35%

Cut outsourcing partners from 14 to 6 with a goal to reach just 3

Retrained staff to take on more problems and responsibility

Traditional phone scripts were scrapped

Techs in other countries were taught to be empathetic

Stopped counting “handle time” per call

At Dell’s worst, more than 7k of 400k suffered an average of seven transfers per call

The transfer rate has fallen from 45% t0 18%

They now resolve 90% of problems in the first call

Read Jeff Jarvis’ article: http://www.businessweek.com/bwdaily/dnflash/content/oct2007/db20071017_277576.htm?chan=top+news_top+news+index_top+story

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Tips for Improving Customer Service

Answer your phoneUnder-Promise and Over-DeliverListen to your customers

Create a Twitter account and listen to the buzz Create Google Alerts for mentions of your

company or your productsTake the extra step

Do more than requested of youTrain your staff…regularly and often

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Reason #2: Failure to Communicate with Your Employees

“What we have here is a failure to communicate.”

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Reason #2: Failure to Communicate with Your Employees

80% of companies acknowledge they are not doing their best to communicate strategy through the organization

Only 18% are good at converting corporate strategy into priorities and goals

Just 15% are very good at aligning employee activities to corporate strategy

Only 17% of organizations know all of its top performing employees and are looking to develop them for future roles

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Why we don’t communicate

Why do business leaders fail to communicate effectively, if at all? They don’t think about it. Too often it’s an

afterthought. They make assumptions. They think

employees have little interest. They don’t care. Those with big egos care

little for their organizations and are the ones who don’t last long.

They are afraid of conflict. They don’t communicate well. Failure to

prepare and carefully craft their message, leaders often fail on this point.

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Tips for Communication

Hold quarterly business meetings Update employees on the actual results against your

business plan

Offer encouragement

Listen to your employees – really listen Ask questions and listen to their honest feedback

Don’t judge or pre-judge

Honor employees Recognize every worker once in a while

Break bread with your employees Once a month, take a different group of employees to

lunch and learn about them

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Reason #3: Failure to Market Effectively

Examples of marketing mistakes…

Where? Yass, Australia

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Reason #3: Failure to Market Effectively

Examples of marketing mistakes…April 23, 1985 – the launch of New Coke

…only to remove it from the shelves on July 11th.

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Missing the Importance of Marketing

64% of business surveyed failed because of owners

minimizingthe importance of properlypromoting their business

--Report by US Bank

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Push Marketing v. Pull Marketing

Push Marketing: Using push marketing, you actively push your

product toward a targeted audience. In some cases, you literally create a market for your product.

Pull Marketing: Pull marketing involves creating a demand for your

product. A good example of this would be the infamous Tickle Me Elmo a few years ago, or the Zhu Zhu pets this past holiday season. Kids saw these toys on TV and wanted them. Usually, you sink a considerable sum of money in pull marketing because you must actively build a demand a desire for the product, which generally takes a lot of advertising!

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Examples of Ways to Use Both Forms

Pull: You create an online community associated with your online business. As more members join and participate in the forum, they become involved with your website and your product/s. In this way, interest is translated into buying, and buying into customer loyalty.

Pull: Start a blog for your business and consistently post good quality, well written and informative articles relevant to your industry in some way. By delivering information that is of value to readers, you attract attention to your business and products through people who read your blog.

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Examples of Ways to Use Both Forms

Push: eMail marketing is a prime example of push marketing. Sending out email newsletters and emails telling subscribers about sales, specials, promotions, contests or other noteworthy happenings on your website that might benefit the reader is a great way to use push marketing without spending much money.

Push: Paid advertising such as pay Per Click and banner display ads is an example of push marketing, although not inexpensive.

Note: Look for the “Stand Out” report that provides a wide range of ideas on this.

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Reason #4: Failure to Use a Business Plan

78% of businesses fail due to lack of a well-developed

business plan--Report published by US Bank

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Planning for Success

Establish SMART Goals S = Specific

M = Measurable

A = Attainable

R = Realistic

T = Timely

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Planning for Success

Develop an annual business plan including:

an outline of changes that you want to make to your business

potential changes to your market, customers and competition

your objectives and goals for the year

your key performance indicators (KPIs)

any issues or problems

any operational changes

information about your management and people

your financial performance and forecasts

details of investment in the business

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Planning for Success

Business Planning Cycle review your current performance against last year/current year

targets

work out your opportunities and threats

analyze your successes and failures during the previous year

look at your key objectives for the coming year and change or re-establish your longer-term planning

identify and refine the resource implications of your review and build a budget

define the new financial year's profit-and-loss and balance-sheet targets

conclude the plan

review it regularly - for example, on a monthly basis - by monitoring performance, reviewing progress and achieving objectives

go back to step 1

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Reason #5: Failure to Manage Hidden Costs

Where are the leaks in your organization?

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What leaks do you have?

Lost customers

Increasing costs

Hidden costs

Low productivity among employees

Low profit sales

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Two Ways to Address the Leaks

To increase profitability or replace $1 of lost profit…

Option One: Increase sales 7 times

Option Two: Save $1

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Most Dangerous Leak

Hidden costs are your most dangerous leak

Example of a hidden cost…

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The Problem

“90% of companies do not know how many output devices they have, or if

they are properly utilizing their print assets.”

--Source: HP

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The Problem

• Document costs account for 1% to 3% of the typical company’s annual revenues

• Annual printer volumes are increasing: 9% (B&W), 19% (color) (11% total overall)

• 60% of all paper documents originate at the printer• 70% of copied documents originate as printed

duplicates of an existing electronic document• The average employee spends $15,000/year in

document output

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The Typical Office

Multiple vendors Copiers, desktop

printers, fax machines, etc.

Multiple supplies Multiple cartridges for

various modelsMultiple invoices

Invoice for the lease Invoice for the supplies Multiple vendors –

multiple invoicesReplacement costs

The Office with MPS

Single Vendor One vendor to manage

all print-related devicesMinimize the number

of different cartridges Standardization of

devicesSingle Invoice

One invoice that covers everything except for paper

No Capital Expenditures

If it can’t be fixed, it’s replaced at no charge

The Solution

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AN AVERAGE MONTHLY SAVINGS OF 15% TO 20%

The Result…

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Closing Bonus

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