Why Businesses Fail


Welcome to this week’s installment on planning and forecasting for your small business. Head over to our Youtube channel and take a look at these pieces from Business Know-How and the WynnerMind blog to dive deeper.

https://youtu.be/ECQyRzoaxR4

In our strategic planning and forecasting segment today, we’ve been doing some research and talking to clients about the planning process. As you know, Harvard Grace assists companies in doing strategic planning and helping with the process and doing the forecasts that come out of these plans. Lately, we’ve been talking to clients and doing some research on why businesses fail. But really… why do they fail to plan? Why do people not want to plan?

For one thing, it’s hard. Secondly, you’re engaging in trying to predict the future, and most of us innately know, “Uh, well I can’t predict the future, so i’m not gonna try, and therefore I’m not going to engage in the process.” We think there’s a bit of a nomenclature problem here, in that planning is not predicting the future. We’re doing a bunch of “what-if” scenarios on what we believe, but so far we’ve found a couple of interesting articles (linked above) that deal with other reasons why business managers or business owners fail or ignore strategic planning.

One of them is a lack of expertise. They don’t know how to do planning. There are some great resources out there available to us these days that will absolutely step-by-step walk you through the process, and we’re happy to help you as well. Another is they feel an inability to get started. We’ve talked about that a few times in this segment, and the the way to get started is to… sit down and get started. Most of this inability to get started is related to an unwillingness to block out sufficient time to engage in the process. You have to have a different mindset, and if you don’t get out of the office, or if you don’t book a full day and sit down with your team to go through the issues of your business, then you’re never going to get it done. You’re not going to get it done over lunch. It’s not an afternoon in the office. You must block the time and get away from the day-to-day.

There are so many variables… most of them are uncontrollable, often they’re intangible, and so they become difficult to think about. You’ve got to study these variables and understand their behavior, so that you can perhaps predict their behavior and how that will impact your business. We’ve already talked about the focus on daily operations. You’ve got to step back. Most people (we think) fail to engage in the process because they fail to recognize the importance of planning.

You don’t go on a trip without making a reservation, and in the process of making a reservation you might find out the hotel’s almost booked up… that must mean it’s going to be crowded. That’s planning! It’s very similar to that. We would suggest you start looking one month or one quarter ahead and work on that, and then you can work yourself up into doing a year, a three year, and a ten year goal, because you’ve got to get yourself into the mindset. Frankly, you need to believe that it’s worthwhile, and we promise you that it is.

If we can help you get over your resistance to planning, please reach out, contact us, take a look at these articles we linked above, and let us know what you need!

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