65 Great Ways Not To Grow

Saturday morning. I was trying to figure out what to say at a breakfast seminar to a bunch of SME business owners this Tuesday when I stumbled across a very interesting list from the UK Insolvency Helpline site (www.insolvencyhelpline.co.uk) of the top 65 reasons why sme's go out of business. Were there really 65 different reasons? Wow! What creativity on the part of small business owners. I was intrigued.

Unfortunately, upon reviewing the reasons, I was yet again stunned by the bland, blindingly obvious reasons (and totally avoidable!) reasons why firms go broke. Here are a few of my favourites:

- Failure to adapt your product to meet customer needs
- Failure of businesses need to grow - Poor management
- Directors aiming to find new markets, but not making a single sale
- Companies diversifying into new, unknown areas without a clue about costs
- Company directors spending too much money on frivolous purposes thus using up all available capital

Failure to have a product that meets customer needs? Failure to grow?...err...Ok. Directors spending too much money on frivolous purposes? This stuff is not exactly complicated.

Unfortunately, virtually all of the 65 reasons are fairly obvious and very often avoidable. This 100% matches my experience as a business growth consultant. Many of the management teams we work with are filled with brilliant and talented people who are not doing some obvious things.

The other thing one can see on this list is that 50% of the reasons listed are just about money...costs too high, cash flow, customers not paying etc. etc. All true but in my experience, in many cases, a money problem is simply a symptom for something else...like a lack of strategy or clarity of offer which leads to a money problem.

I am going to use this fun list this Tuesday morning and see how true it rings to the business owners in the room. Have a look at the UK insolvency helpline site.....see if it rings any bells for you. DWG