Over the last four months we’ve been discussing what it takes to own and lead a company and the necessary traits that leaders possess that set them apart from others. July—Motivating the Man in the Mirror; August—It’s About the Money; September—A Touch of Class; October—Mental Toughness.
I thought the series was important because even in good times it’s incredibly tough to lead and manage a business; we don’t have safety nets, and no one is going to bail us out if and when we misstep. Being on top of your game takes persistence and practice.
Which brings me to a final piece of management advice—Press On.
While conducting my research I found some startling statistics that reinforce all of the key discussion points we’ve been having. Depending on the source, business failure rates across all industries are high. The chart below shows some of the more conservative statistics I found. What was shocking was the failure rate after five years in operation.
There are major causes firms go out of business:
Incompetence—46%. Specifics of the category included no formal business plan, no knowledge of pricing, no knowledge of financing, failure to pay adequate taxes and no experience in record keeping.
Lack of Managerial Experience—30%, including inadequate borrowing practices, poor credit granting practices and expanding too rapidly, going into business for the wrong reasons, owner gets worn-out and/or underestimates the time requirements, family pressure on time and money commitments, pride, lack of clear focus, lack of financial responsibility and awareness.
After reviewing the major causes firms go out of business it’s clear often the basics are overlooked. We will continue to write about these important topics and more. And, this is probably the appropriate time to remind all of you—we’re archiving all of these important articles on our website. We’re building you a database of management advice addressing business problems and opportunities with very specific steps that will help you through the minefield we encounter every day.
I’ve enjoyed writing this series and hope you’ve enjoyed reading these articles. Thanks for all the compliments, comments and suggestions.
Nothing in the world can take the place of persistence.
Talent will not; nothing is more common than unsuccessful men with talent.
Genius will not; unrewarded genius is almost a proverb.
Education alone will not; the world is full of educated derelicts.
Persistence and determination alone are omnipotent.
Ray A. Kroc’s credo – Founder, McDonald’s Restaurants