An Owner Who Can’t Get Out of His Old Ways

Many of us fall into the trap of applying a basic approach when it comes in trying to accomplish anything. That trap can be summed up with the description: “plan, optimize, execute.”

Known as prediction reasoning, this way of thinking is based on the assumption that the future is going to be pretty much like the past, and, to be fair, it can work wonderfully in certain limited situations.

The problem is the world in which you are operating today is often extremely unpredictable and that means you need a radical change in your thought process to handle any number of situations as you try to navigate in the unknown.

Serial entrepreneurs, individuals who have successfully started multiple companies, have mastered managing the unknown. (After all, there is nothing more uncertain then starting a business.) To follow their lead and take control of the future, small business owners specifically–who we will use as the example here–and the rest of us in general, must:

1. Begin by taking a small (smart) step forward. It may not be the right direction but as the owner of a small business, you will never know if you don’t try. When starting a new venture, ask potential customers what they think about your idea, long before you pour any significant money into it.

2. Evaluate the feedback and see what you have learned. If potential customers have thoughts about your idea, listen to them. Their response is invaluable and could offer a new outlook. For example, you may have an idea to open a new restaurant, but potential customers don’t seem enthusiastic. There are a lot of restaurants in the area but if you offered complete dinners they could pick up on their way home, ones that could be reheated once they got there, they would be thrilled.

3. Build that learning into what you do next. Take this feedback and, if necessary, reconstruct your path. Take a step in a different direction to see what happens as you experiment with new ideas. For example, show potential customers sample menus for your now take-out dinner idea.

As we researched our book “Just Start: Take Action, Embrace Uncertainty, Create the Future,”we came to think of this new thought process as Act; Learn; Build. The steps repeat until an outcome is achieved–the business is up and running; your new idea is a success, or you decide you can’t afford or don’t wish to continue.

Admittedly, transitioning to the Act; Learn; Build; thought process may not be easy because we’re accustomed to using prediction reasoning all the time. And like anything that’s repeated over and over, prediction reasoning has become a conditioned habit for many and as we said in certain situations, it is the right approach to use. For instance, on a road trip, travelers are confident that a GPS and map will guide them to the destination. Prediction reasoning, with its detailed forecasts and plans, works well in moving you along a known path but running a small business or getting a new idea off the ground, is not so easily maneuvered.

But any time you head off into the unknown with a new business plan, product or service, the logic of prediction reasoning is of little use. That’s why many of us are often the biggest impediment to our success. Using prediction reasoning in situations which are simply not predictable is bound to result in disappointment and frustration.

When embarking on a new project, there is little to be planned beforehand. It’s difficult to gather appropriate resources without first knowing what’s needed, and trying to optimize is extremely difficult, if you don’t know what roadblocks you may encounter.

In these situations, Act; Learn; Build will help guide you through the inevitable hurdles that characterize today’s marketplace.

The predictability of the world has changed drastically. Shouldn’t our way of thinking keep up?

Why Business Fails…!

A Chauffer driven limo, the red carpet and theworld at your fingers, you gotta be kidding me, Right?

How many of us have had dreams like this as a kid, becoming the professional athlete, movie star, the big-time executive business tycoon. Most of us have had dreams in our lives but the bitter reality is, they are just dreams.

Probably most of you have tried starting your own business. Maybe, joining your friends’ multilevel marketing, with the ambition someday, somehow, you would be the one up on stage,collecting the notoriety for all the hard work that you had done.

I’ve been an entrepreneur for over 25 years, with an MBA, and completed half of the doctorate in business administrationand entrepreneurial studies at the dissertation topic.

The shocking reality is the part of running a successful business and really making it succeed is stacked against all of us. Whereas, 96% of all businesses do not see their 10th anniversary and out of those 80% will close within the first two years of operations. Stop and think in recent years some of the iconic businesses that failed, Kodak, Circuit City, Woolworth’s, just to name a few of the many enterprise companies that have been left in the boneyard business. Two American icons that are currently on life support are Best Buy and Sears.These statistics do not just apply to small businesses but you have to think about that for a moment lesson then 4% of all businesses can see their 10th anniversary.

The ability to adapt and have a clear vision of what your goals are is a critical part of any business success. Here’s a list of the top 10 reasons businesses fail, if you can understand this properly adapt to tenfold your ability to succeed.

  1. The math just doesn’t work.
  2. An owner who can’t get out of their old way.
  3. Out-of-control growth
  4. Poor Accounting
  5. Underfunded
  6. Operational Mediocrity
  7. Operational inefficiencies
  8. Dysfunctional management
  9. Lack of a succession plan
  10. A declining market share or shift in the marketplace

Over the next few days I’m going to dive deeper into a few of the common causes many businesses fall into the comedown trap of failure. Understanding these aspects of business is just as simple as standing success syndromes. The success syndrome is the why and how businesses succeed. Often times, luck and timing are given too much credit for business success. There are commonalities among most business success stories. We will be reviewing these concepts and ideas as well.

Sincerely,

Robert Fox