This site has MOVED to www.bauermanagementgroup.com

To those of you who have been with me since the beginnig I want to thank you and let you know that this site has been moved to http://www.bauermanagementgroup.com. The content is all the same but the flow should be much smoother. This move allows me to manage one less url so that I can help you all work on your business.

Cheers,

Jeremi

Why do Businesses Fail?

Part 1: Lack of Planning

By: Jeremi Bauer

This is the fist, of an eight part series, to help business leaders identify and course correct before their business enters crisis mode, or worse, FAILS!  In this series, I will discuss eight areas that cause most businesses to fail and solutions to help avoid entering crisis or even stagnation.  Part One deals with the lack of planning; no I am not talking a full blow business and marketing plans, although these two formal plans are recommended.  I am just talking about simple plans like, how are we going to penetrate a market, how are we going to win a customer, how can we improve our manufacturing process, and the like.  Most business leaders go about these situations in an ad hoc fashion, sort of a fly by the seat of your pants and make it up as you go practice.  This is highly ill advised.

According to former President of the United States and Army general, Dwight D. Eisenhower, “Plans are worthless but planning is indispensible”; the concept behind this quote is that a plan is only good up to the first hint of resistance.  At this point, the plan is worthless because now you have to make real time decisions that may alter your original direction or intention.  This is where the ‘planning’ takes over and is used as a guide in these real time decisions.  See, planning, when done properly is based heavily on research; research about your company, your competition, your market(s), your customers, and most importantly, trends that may affect the way you do business in the future.  Graduates from business schools, and readers of business literature, know this process as the SWOTT analysis, which stands for Strengths, Weaknesses, Opportunities, Threats, and Trends.

The SWOTT analysis is a great tool for evaluating your organizations internal (strengths and weaknesses) and external (opportunities, threats and trends) realities at any given moment in time.  I recommend to my clients that they do this exercise at a minimum of twice a year, with quarterly being optimal.  However, this exercise should be taken to the next level and be done for each of your top five competitors.  When done properly, you gain an understanding of your opponent at a very intimate level.  With this level of understanding, you’ll know what they are up to as they’re up to it, and potentially before they are!  There are some of you saying right now, I don’t care what my competition is up to, I am going to run my business and let the better company win.  The problem; is that the better company is the one that does this, and if that happens to be your competition, you LOSE!

I know this is a thought process of some leaders because I was in this exact discussion with a business owner a few months back and this was his position.  His logic, according to him, was that sports teams work up their game plan around their teams strengths and when they hit the court (field, rink, gym, etc) they play their game and make the opponent change their plans.  The flaw with this logic is that it presupposes the team did not study their opponent.  Now, as a former college athlete, I know this is just not true.  Coaches at all levels, peewee, high school, college, and pros watch hours upon hours of film about the team that they are playing to learn their strengths and weaknesses.  From this information, these coaches put their game plan together.  Nevertheless, just as I mentioned above, as soon as the coach realizes that his or her plan is not working they change their plan and make real time decisions.  However, they are still able to use the information from the planning process to make informed real time decisions.

To sum it all up, business owners and leaders need to make planning (working on your business) a part of their everyday activity.  They need to step away from the micromanagement of the daily details (working in your business) and let the people you hired do their jobs.  This leads us to our next topic on why businesses fail, lack of employee management, which will be coming in a few days.  In the business tools section I have provided a template for a SWOTT analysis for you to use in your organization, free of charge.  If you have any questions or comments fell free to leave them here and I will get back to you.

Jeremi Bauer.