What is it that successful entrepreneurs know and you don’t?
Bill McBean, a successful entrepreneur in the auto industry, wrote a compelling book called “The Facts of Business Life” detailing his advice on how to avoid business failure.
His seven pieces of advice aim to promote the likelihood of success for any organization.
1) Behind every great company is a great leader. According to McBean, great leaders know how to define their goals and create a plan to direct their company to achieve those objectives. Leaders should have a vision of what that strategy is and how to put it into action. Employees tend to follow the type of work habits, philosophy, and direction their business leader practices.
2) Leaders should know the ins and outs. Great leaders must know what every employee does and understand their day-to-day operations. A successful company needs management that can look for ways to make processes more efficient. McBean advises business owners to point out improvements and be clear about consequences when employees deviate from policies and procedures. If a business owner is not strict, he/she will lose control of the company.
3) Money matters. The most important factor in how to avoid business failure is protecting the company’s financial assets. Businesses must be aware of their investments and closely maximize their profits. McBean warns if you aren’t aware of your company’s investments, they may unpleasantly surprise you and cause you more hurt than gain.
4) Plan for the future. Business leaders don’t have a crystal ball, but they can make educated predictions and plans for action. McBean gave the example of Ford Motor Company. Before the financial downfall in 2008 and 2009, Ford restructured its debt and raised funds in its cash reserves. McBean says this thoughtful move saved its skin during the meltdown.
Its competitors, on the other hand, GM and Chrysler, ran out of money and needed taxpayer bailouts to avoid bankruptcy. Remember to think ahead and plan for the unexpected.
5) Stay current and know your brand. Once you’ve built a great product or service, know how to market yourself. McBean encourages new businesses to invest in a solid marketing budget to ensure consumers are aware of the product or service. Take the time and energy to invest your marketing funds into a strategy that works for your target market.
6) Be competitive. A new business must adopt the mentality that its success is contingent on winning battles. You have to fight to the top if you want to succeed. If you don’t, McBean warns, your competition will beat you to the prize.
7) Focus on your principles. General business practices apply to all industries. Don’t get too narrow-minded about specific fields and forget common sense. According to McBean, business owners must understand all aspects of the business. If you’re not an expert in accounting, tax law, finance, or management, it might be wise to seek advisement. You don’t want to make crucial mistakes in these areas.
By following his advice, any company can learn how to avoid business failure. McBean doesn’t believe entrepreneurs will succeed if they don’t understand these key concepts and apply them in their business practices. Leaders can learn from those who have gone before them and make wise decisions.