The Real Reason Businesses Fail
I often hear from business owners that the banks won’t lend them any money to run their businesses, or that the banks are making it difficult to borrow. Some tell me that if they don’t get a loan, they will probably have to close their doors.
This could be true. But I have found that the real reason businesses fail is because they haven’t satisfied their customers’ needs, wants, and desires.
I’m not going to say that this is the case 100% of the time, but I’d say it’s probably the case 97% of the time.
When things work out for a company, it means that it is filling the needs, wants, and desires of the customers at a value for which the customers are willing to pay and at a price that is more than it costs the company to provide that value.
It’s really that simple. Just sell something for more than it costs to make it and you’re fine. Well almost.
Of course, there are numerous other factors that come into play before a business will be successful. But no matter what else you do, if the basic value and its corresponding price-to-cost ratio don’t work, the rest doesn’t matter.
So make sure you get that right.
Then add these 3 questions to make sure your business is on the road to success:
How do I apply today what I learned yesterday?
What do I expect to learn today?
What will I need to change next year to stay ahead?
I challenge you all to keep these questions nearby and answer them each day. If you don’t have the time to do it each day, then do it at least each week. The answers could only help you.
I feel that the opportunities that exist today are great and abundant. Due to advances in communication and the global business community, there are more opportunities for businesses to grow and thrive.
So focus on these fundamentals and you can keep your business from being one of those that fail.
Let me know your thoughts on this by commenting below.