WHY BUSINESSES FAIL Action Points for Lesson 19
Review all ideas within this lesson Identify the area you’re weakest on. Think of 3 ways to fix it and take action with one. Remember, if you have any questions….you can ask/post these directly to Brian Sher in the forum area on The Fortune Institute website Use the corresponding lesson thread when asking specific questions relating to that lesson Or you can ask Siimon questions each week live in our Q&A session or email them in early to
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See below handout for review and brainstorming of today’s ideas.
WHY BUSINESSES FAIL Action Points for Lesson 19
1. INTRODUCTION A huge proportion of businesses fail. o Why? o And how can you avoid being one of them?
2. WRONG BUSINESS No competitive advantage - change inertia- people will stick with current supplier o advertising agencies Slow growing/declining o Video stores, PC’s Too many competitors o clothes, apps, music Doesn’t fit your style o engineering, MLM Don’t just focus on money o Big equipment costs tv post production/printing
3. NEW STYLE OF BUSINESS I applaud people who create a totally new industry. There’s potential great wealth - Ikea, Bic, Ford. But much more likely to fail too. Safest choice is take a proven industry and make a change to it.
4. NOT ENOUGH DATA Measure , measure, measure. David Sokol CEO Net jets/ Buffett’s fix it man - measurement Most people aren’t clear on: Time spent selling? Sales success rate?
Which ads work? Where customers come from? Average purchase per customer? Net margin? Most valuable customers? What competitors are doing? Do one page monthly summary sheet
5. DOING LOW VALUE ACTIVITIES Most people doing useless stuff. 3 biggest: 1. Administration 2. Meetings 3. Emails Dr Fred Grosse - dollar productive activities 6 hours a week/ me as copywriter o Solution? – become conscious/get clear on dollar productives/ do more o get an assistant/outsource- Sokol 2 fulltime/1 part time o Schedule ideal day/ stick to it o Do your dollar productives first
6. POOR STAFF CHOICE It can just be up to you. No growth potential. Key is great staff. o Positive - research shows positive people – o perform better o have less stress o resilient o increase morale o Committed/ambitious - on fire o enthusiasm o very persuasive o will work hard o see themselves as self employed
7. POOR STAFF TRAINING Only 2 things you need to teach: 1. What you want/ value 2. Productivity – no one does!
8. NOT ENOUGH CAPITAL Two points of view 1. Most start ups run out of money 2. Many start ups began with very little money! Don’t take the risk: Create your projections, then: 1. double cost 2. double time 3. halve results Have enough capital to survive 6 months
9. WRONG PARTNERS 4 rules: 1. You know them 2. You like them - important! 3. Complements your skills - me big picture/got partner similar! 4. Has same vision - clarify it beforehand Write it down
10. BAD MANAGEMENT Leaders roles: Set goals/priorities - most unclear – o Next 90 days? o Year? o Decade? Inspire and motivate - don’t just work! Work mimics family/ people want father/mother Be a role model - nothing more effective Honesty, warmth, efficiency, consistency, humility - Jim Collins research
11. PRIMITIVE SYSTEMS Two types of business: 1. Talent based business.- Movie studio 2. Systems based business - McDonalds Systems based businesses are better because: o More cost efficient- less high salaries – o More scaleable - not limited by talent o Less stressful - let the system do the work. o But most entrepreneurs have no systems, so remain small. You need: o Performance evaluation systems - weekly/quarterly/annually
o Information systems - what money /clients coming in o Planning systems - your company planning should be scheduled o Morale systems - how do you keep people happy? Events, pay reviews, competitions o Marketing systems- how do you get customers? What are you testing? o Client happiness systems - contact, surveys o Financial systems - health of company
12. LOW CONFIDENCE Dan Sullivan - confidence the most important skill: o Everything changing so fast - need confidence to handle it o And the need for confidence never changes. How to get it: 1. Preparation 2. Expert knowledge - John Mcgrath, John Symond- Reserve Bank , Greg Coffey- giving up $250m 3. Work on you self identity 4. Work on your mini identities- identify
13. ADVERTORIALS Often more read People don’t trust ads. Do trust journalists Longer copy
14. GIVING UP TOO SOON Three feet from gold story - same with business. Many companies started slowly: Hewlett Packard, Sony, Morgans Hotel Group, Chanel. Keep going, eventually you reach Tipping Point- Malcom Gladwell Brian Tracy Flight plan analogy: 1. Choose your destination 2. Write your flight plan 3. Take off at full throttle 4. Plan for turbulence 5. Make continual course corrections 6. Persist until you succeed Business success is not an accident!
MY NOTES
