Have you ever wondered why most businesses fail? In the UK, on average, two thirds of all businesses fail in 3 years. This is an appalling statistic. Most business failures tend to blame everyone else except themselves for their misfortune, as says Robert Craven, a personal favorite and marketer, and a leading authority on business advice for the SMB industry in the world. United Kingdom. Independent research from the UK in recent years points to two key drivers: poor marketing and a failure in financial management. Criticisms of managerial incompetence suggest to me a weakness in the decision-making process of SME management and in monitoring the decisions made. What action can you take as a business owner when sales plummet or profits collapse and pressure mounts? A common consensus among management consultants, business mentors, and business coaches is that the temptation to bury your head in the sand is so strong that many SMBs are unable to make that change. So what can we do to avoid these management problems?
Proposals by leading experts have suggested that SMEs need an “early warning system”. Is this like a fire drill, a ‘what to do in case of fire’? This seems logical, and the balanced scorecard (Kaplan) is an excellent system for SMEs to monitor their business performance. The concept was developed and expanded in the US in the late 1980s and early 1990s, and provides a single management report that provides management with an up-to-date position on business performance at any time, based on key performance indicators (KPIs). . Many UK corporate companies successfully implemented this system, notably Halifax in its meteoric rise in the 1990s, leading to its merger with the Bank of Scotland (HBOS). The scorecard can be sued to track any aspect of the business, from money-generating activities (daily revenue, transaction value per customer, volume of new customers, value of refunds and returns, customer complaints) to other critical success factors. such as productivity (lead times, unit costs, waste, unit volumes) internal business processes, human resources (personnel assistance, including moral personnel), finances (creditors, debtors, fuel costs), etc.
Most importantly, the dashboard is designed by management itself and reports on the key performance indicators they have chosen. Microsoft has now tried to incorporate the scorecard style into its own financial package for SMEs. Even a one or two person operation would certainly benefit from the help of a financial specialist to help set up the system at the beginning or at the time of review. Where is a good place to get high-quality but reasonably priced financial experience? Your local Regional Development Agency (RDA) has a registration and new services like Business Service Finder. Marketing, I’ve heard it said, is the least understood but most important skill in business. Since it is impossible to have all the management skills and experience “in-house” in an SME, it pays dividends to outsource the work. In fact, most business owners don’t delegate at their cost (plus managerial incompetence). Business planning and strategy implementation are such key activities that experience is extremely useful and the return on investment is many times greater than the initial investment.
Personally, I have had conversations with business leaders who seem to think that marketing is simply referring to the color of the categories in their brochure, yet they run a sizeable business. One of the best definitions of marketing comes again from Robert Craven, who wisely commented, “Marketing is the battle for the consumer’s mind, not a battle for the product.” It does not mention the color of a brochure or the color of a small item of a product, and let’s never forget the main reasons for business failure.
A good marketer would aim to train management to follow the direction in which they started and introduce efficient systems to stay on the right track. Ignore the Internet today is commercial suicide (see my EzineArticle “3 Key Aspects of a Business Website …”). E-commerce and the ability to generate income from the Internet is a Critical Success Factor (CRS). In this recent global recession, it is not known how long it will last or what effect it will have on your industry and your business. Acquiring new customers is an ongoing process that goes hand in hand with improving performance. The Internet supports most of the companies that survive at this time. The time is now to review how well your eCommerce and eMarketing strategy is performing, and it is best to consult an external specialist consultant to help you take an objective point of view and consider the best options and solutions.