Can Your Business Survive?

March 5, 2013

Building a strategy by creating a business structure with room to grow, is one of the most critical elements of sustainability. Being an entrepreneur in business is not only about generating revenue and increasing your return on investment, but carefully crafting a plan of action which strategically promotes growth and continuous revenue over an extended period of time. Keith R. McFarland, Author of The Break Through Company discusses how in America, only about 0.10 % of businesses ever achieve annual sales of $250 million.

In 2002, Forbes Magazine published an article on the topic of why companies fail. They conducted a study to determine the top reasons:

Managerial and leadership error
Lack of information
Taking on too many high risks at one time
Fear of growth [indecisive]
Lack of strategic development, analysis and future goals/projections
Slow to implement 21^st century technologies into business models
Lack of revenue
Unstable corporate structure/foundations
Flawed judgment [denial, wishful thinking, poor communication, lax oversight or greed]
Refusal to recognize what needs to be done to make improvements

Entrepreneurs go into business for a variable of reasons, but some don’t grow in the marketplace because they simply don’t know how to reach the next phase in business. Often times a hobby may turn into a great product or service, some face unforeseeable financial circumstances and jump at the opportunity, while others pursue the inner passion and leap of faith to create change. No matter your reason for going into business, there are many aspects, which can promote long-lasting success for you, your family and community.

Dora, Smit & Viguerie (2011), state how companies from emerging markets will always have an advantage to survive and grow. Companies from emerging markets are growing twice as fast as those from the advanced economies themselves – starting small, and taking over the market share. Smaller companies usually grow faster than their industries because they are not constrained by size, and their growth is often based on a new business model they can pursue without fear of losing revenue.

David Ahlstrom (2010) discusses innovation, growth and how business contributes to society. They state that innovative businesses generate economic growth and employment, which in turn greatly improves people’s lives. They theorize that steady economic growth is directly attributed toward innovation, and how the small changes of economic growth greatly add long-term benefits to society.

Here are some considerations for business survival and sustainability:

Create products and services that grow with the economy
Conduct a thorough analysis on market trends, consumer spending and the direction of new technologies, that remain in demand over time. Discover your niche market and grow toward the goal of consuming the market share to consistently be in a position of expansion – creating jobs, improving systems and building a team to grow with you.

Change your mind – Be in a constant state of creation
Often times we are stuck in a pattern of sticking to our core strengths as entrepreneurs. This space becomes a comfort zone for us, and stepping out of the comfort zone can be difficult, fearful and unknown. Embrace your ability to constantly be in a place of creation. Whether you are creating a new product, service, process, operation or goal…you have the power to create the changes you want to see based on the future direction of the economy, personal and professional goals. The power is in your hands to create the way you want your business to run. Change your mind by letting creativity take you to the next phase of growth!

Learn how culture affects the growth of your business
Doing business cross-culturally is a great accomplishment. Being in a collaborative process to work with other cultures is what builds society and boots economic growth. Having the knowledge of how culture impacts business is one of the greatest keys to success. No matter the industry, there are global and cultural influences, which impact you, and whether or not your business profits today. They key is becoming culturally aware, competent, being globally sensitive and educated.

References:

Ahlstrom, D. (2010). Innovation and Growth: How Business Contributes to Society. Academy Of Management Perspectives, 24(3), 11-24. doi:10.5465/AMP.2010.52842948

Dora, S., Smit, S., & Viguerie, P. (2011). Drawing a new road map for growth. Mckinsey Quarterly, (2), 12-16.

http://www.forbes.com/sites/kenmakovsky/2012/05/31/why-do-companies-fail/