Running a business is much like being the captain of a ship, but too often we don’t have the basic navigation tools so that when we are blown of course we can find our way back.
In the case of a ship the most basic equipment required would be charts and a compass. In a business these are replaced by a budget and some basic financial reporting that gives us a timely and understandable picture of where our business is and where it is going. Sadly too many business owners have neither and sail along blindly for long periods of time.
As the business sails along, it can be assisted by a favourable wind, or buffeted by a full blown storm! This can give the business a gentle push forward or blow it wildly off course, often with little advance warning. Like the skipper of a ship, our job is to safely keep the ship on the route to its destination, but all too often the storms end up as the driver of the business and luck becomes the main factor in determining its safe arrival.
This overwhelming reliance on luck is reflected by the high level of business failure in the UK. Statistically, around 10% of businesses in the UK tragically fail each year, and this death rate bludgeons on uniformly across the whole spectrum of industries and geographic areas*. Interestingly though, survival appears directly related to the size of the business. For example, a business with more than 20 employees is 5 times less likely to fail than those with 4 or less*.
Why do we think this is?
Well larger businesses have some obvious advantages – more hands on the Bridge. They usually have a Team (board of directors) each of whom is a specialist in their field who are constantly looking out for opportunities to grow the business and simultaneously keeping a watchful eye out for impending storms or even a rogue wave that could sink the business.
The small business rarely has such a Team as every aspect of the business is under the control of just one or two individuals. If we stay with the ship analogy, the captain who should be reading the charts with an eye on the compass while steering the ship, is too often down in the engine room stoking coal. Who then is steering the ship when the storm comes? The inevitable outcome is that many smaller business owners end up treading water, blown of course, or simply drown. The only question is how long will it take to die?
The statistics highlight the obvious, small businesses all too often rely on good luck, but unfortunately this good luck will only last so long!
From 1st January 2009 to 31st December 2009 there were roughly 279,000 Business Deaths
Don’t Risk your business and personal fortune by relying on Luck
So, as the captain of your business, you need to stay on the Bridge, you need to have the right tools – for a ship these would be a Depth Sounder, Radar, Charts and Compass - for a business owner you need a business plan, budgets, financial reporting and some KPI’s (key performance indicators).
The good news is help is at hand. Smart Support Advisors can make a huge difference to your business; we provide all the missing elements and help you and your business find a safe course and, as importantly, help you stay on course. Diagnostics are put in place that will tell you where your business is today and where you are heading while making sure you keep a sharp eye out for impending storms – it can mean the difference between you and your business treading water and eventually drowning, or growing into a healthy stable business giving you the rewards you deserve.
Take action now. Ask for a free Health Check Questionnaire, just answering these questions will give you a fresh insight into your business and we will arrange to come and undertake a free review of your business.
* Source ONS