Can you say business plan? The reason that companies fail is that they don’t have a business plan that addresses what they don’t know. A successful business plan needs to go beyond what a company thinks it knows. The harsh reality is that 50% of small businesses in Canada fail within 5 years – usually because of poor planning, management inexperience and insufficient cash flow.
You can’t know what you don’t know! Most companies fail because they don’t really know their products, markets or customers well enough. They don’t ask the real questions which are “How can we make our customers more profitable? How can we extend our customer’s reach into net-new markets? What don’t we know about the products we sell? What markets are we missing? Are we afraid to go beyond our comfort zone, what we think we know? Why are we not bringing our customers ideas and opinions into the business plan? “.
A good example is that I was talking to a well established fashion and work glove distributor with over 35 years of experience who is having a hard time maintaining his sales and growing new business. I suggested he expand his offerings to include sports gloves. He did not see sports gloves (cycling, golf, football, etc…) as being gloves. It was obvious that he was out of his comfort zone and did not know his market well. What he did not know is that we are talking about $730 Million in cycling glove sales and $340 Million for football gloves last year in the USA alone and growing at near 2% CAGR.
That is only one example of how
an entrepreneur can fail, being too close to the business and not seeing the forest from the trees.