Monday, January 7, 2008


1. Lack of Direction – It is important to have specific goals and a business plan. With a business plan in place you will worry less about the small”problems” and concentrate more on the plan itself. You will be working towards your goals.

2. Poor Cost Control, especially when starting a business – The challenge in business is to retain as much of the cash inflow as you possibly can. Remember that even though you may be in business, you are still working for the benefit of others. If your landlord, stationer, advertisers or staff are making more than you, then you are in the wrong business! Be frugal, coserve as much cash as you can. Those starting out in business should carefully monitor their set-up costs. Minimise these costs by starting modestly and buying used assets where possible.

3. Poor and irregular reporting of profits – You must keep your finger on the financial pulse of your business. Weekly or monthly profit reporting is essential.

4. Loss of momentum in the sales department - Sales staff should be the most motivated people in the business and they should keep thinking about customer needs. Your business exists because of your customers, so treat them importantly. Their needs must always come first, In fact, everything possible should be done to satisfy their needs.

5. Failure to anticipate market trends by failing to recognize the changing needs of customers and clients – Your product must be relevant to the market today and you should be looking for tomorrow’s products. This is one of the most common causes of failure and will be looked at in much greater detail later.

6. Inappropriate leadership style – When successful companies grow they often become bureaucratic and regulatory in their approach. They can even lose the dynamism that produced their success in the first place. A company should not be run by bean-counters(accountants and bureaucrats). Successful businesses need people who lead with initiative and flair.

7. Failure to hire good staff – One way to protect yourself here is to only hire people. Better than yourself. If everyone within your company did this then their position then standards would inevitably
Improve. If people only hired those who would not threaten their position then standards would deteriorate and the business would
Inevitably decline.

8. Lack of capital – A business should have capital in reserve to tie it over the tough times, which inevitably occur.