Three Reasons Why Businesses Fail

Businesses fail for lack of customer service, leadership and vision and strategic planning. Whenever one of these things is not performing at its optimum level business success is adversely affected.

Customer Service is important as without it a business's ability to generate sales is affected. You need to have staff who can understand the needs of the customer. This encourages customer loyalty. In addition, you need to have products/services that promote customer loyalty and/or serve a particular market segment. Loyalty programs can help increase customer loyalty up to a point. Any product/service that appeals to a particular customer base can help increase loyalty. But it the combination of these that has a real effect on keeping customers loyal and adding new customers.

Leadership is important as they are the driving force behind your business. They will determine the direction your business goes and how quickly they can get there. This is because they are responsible for managing the staff and putting into place ideas, processes and systems that will lead them to the destination they want to be at. Regular communication is essential so it correlates with your own vision, ideas and processes otherwise you may end up at a completely different destination than the one you intended.

Vision and Strategic Planning are the final cornerstone in this puzzle. This is because you can have all of the above but if you don't know where you are going you won't know where you will end up. Vision should be over arching, you should work out the end point you want to be at that correlates with your vision. Say for example, you want your business to focus on customer service (this is your niche) and that you want to have a 5% Return On Investment within 5 years (this is your end point). Your vision is related to customer service but your strategic plan is focused on the 5% Return on Investment, but your strategy will determine how you will get there. This in turn is related to your vision of being a customer service focused business.

Managing these three areas effectively will help ensure the success and continuing force of your business.