Why Do Businesses Fail in the 21st Century Part 2?


Published: December 6, 2021

Courtesy of Fusephase.com

Summary

I wrote this blog over a year ago; however, I could not find it anywhere on the internet. So it was written then is appliable today, or re-curated the article to make it applicable for 2021. Hence is the next of a ten-part series on why businesses fail in the 21st Century, so enjoy.

This blog is part 2 of “Why Do Businesses Fail in the 21s Century Part 2?” When Annette B. Haag, on January 1, 2013, had published “Writing a Successful Business Plan.” some 20-years earlier, Ricketts, Van Auken, and Manning (1993) had made somewhat of the same conclusion of why businesses fail. And above, we have a chart from Fuse Phase, which echoes reasons why companies fail to grow. So knowing all this, why do entrepreneurs still make the same mistakes over and over and still fail?

The small business economy is so important in America that understanding why so many businesses fail is an important topic to take up in today’s business climate. And the health of our business economy is dependent on small businesses being successful, so how do we change this failure rate? In this writer’s opinion, it is education. This writer did the same thing, and he entered into the business world through sales and was good at it. So my attitude led me to believe that I could successfully operate a business with this skill-set and without a business plan.

Knowing When to Pivot

It was not until the 2008 Financial Calamity in the mortgage industry that I made a conscious decision to go back to school and continue my education. Eight years later and $160,000.00 in student loans, I have a terminal degree in business, a Professional Doctorate of Business Administration in Entrepreneurship and Business Management, an MBA. In Marketing, and a Bachelors in Marketing and graduated Cum Laude. This new knowledge and self-confidence have changed my entire attitude on what was uncertain of in the past. One caveat on business management that is still not taken seriously is developing a written business plan. So ask yourself this question if all the scholars suggest developing a business plan could enhance the success of a business over that of not having one, why would an entrepreneur not create one?

Business Acumen

The business plan is the number one reason for business failure. The second is leadership skills or management, and the third is cash-flow management. Entrepreneurs should go through education to focus on why businesses fail and concentrate on not being that next casualty in the industry. The entrepreneur not being efficient in the operation of their enterprise is another recipe for failure. Thus, it could be from the lack of knowledge on managing a business properly, which could come from the lack of experience in management. Therefore, this could come from training in the acumen to learn what managers do to be victorious over guessing.

Record keeping is so important in business, and the sloppiness of handling records that could be, needed for the company’s management in the future is an asset for control and not a hindrance. Undercapitalization or the lack of recourses and not planning for the future will put the business at risk, then bankruptcy or insolvency is around the corner for the entrepreneur.  Employees are people with other assets, such as wives or husbands, and if they are unhappy, then the household is in chaos, so it is with a business organization. Keep the employees happy, make it fun coming to work, maintain the family-like structure, and feel they are making a difference within the organization.

The 21st Century Entrepreneur

In the 21st Century, the internet, information, and technology are critical to this digital frontier. Twenty years ago, these three were in their infancy, now they are the backbone of commerce, and the three are a part of everything this new generation is involved in today. The upgrade of technology, software, cloud computing, websites for businesses, and the use of software-as-a-service (SaaS) is a must for today’s entrepreneurs to stay competitive in their industry. Entrepreneurs must always understand that customer service is the sealer on the business deal of continued service granted to them to show the business cares and wants them as a customer after the sale. It is proven cheaper to keep a customer satisfied than to find another to replace the one lost.

Concluding Remarks

And finally, change is part of life, and nothing stays the same. Without modification, the entrepreneur becomes complacent. A strong leader is a visionary, and without a vision, the business will falter and cease to exist in time. So I challenge new want to be entrepreneurs, learn about this new career you are incurring, educate yourself on developing a skill-set. Careers and jobs are about specialists or specialties and not generalists; learn to specialize in something that others will pay.

In the digital world that we live in today, the internet has become an essential tool that entrepreneurs did not have some twenty-five years ago. Thus, which transcends into many other inventions that have come about since 2000, and the dawning of this new millennium. Hence, the tool chest of the new entrepreneur is the understanding of how to use a computer. And the utilization of software.

Those young adults born in the 90s were born into today’s digital world, over those born in the 60s and 70s. Hence, at a time when the traditional methodology was active. In the new millennium, practitioners must understand and balance the traditional and the new digital world together and understand when to apply one over the other.

If your organization is having problems implementing and transitioning from a traditional environment to a digital ecosystem, call me, and we will design a transformational plan for your organization. Enclosed is my calendar and schedule your free consultation. in this matter to see if we can be of service with a solution to your business issue.

Book Time On My Calendar Here

Email: donaldemitchell1@msn.com

Website: www.donaldemitchell.com 

I am interested in the readership commenting on this blog. And response will follow.

About the author:

Dr. Donald E. Mitchell work as a Small Business Consultant specializing in management software, digital transformation, digital marketing, e-commerce, website development, and alternative financing.  My primary focus is on small business growth and solutions for growth through sales and digital marketing.

Methodology
The author’s beliefs are personal and reflect his worldview, experience, and academic study and acumen, and research in the issues and practices mentioned in entrepreneurship and business management.`

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