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Why do most businesses fail on an epic scale?

Why do some businesses flourish and have consumers banging down their doors, while similar companies sit idly by, withering away? Let’s talk about the obvious, yet frequently overlooked ingredients of a successful business.

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hard work

hard work

Insights from 43 years in business

Sometimes we make things more complicated then need be, don’t we? The ultra popularity of being online and in business has found half of us wondering how to market our product/service, while the other half thinks they have it wired enough to show us how. Clearly, integrity must be the cornerstone of any business, but assuming that’s in place, what are the common denominators shared by long term successful businesses? 43 years ago today, I was given the answer to that question in no uncertain terms. It’s not a ‘secret.’ It’s not high tech, as it was as true a few thousand years ago as it was that day in 1969, and is now.

There are many, but the most important common denominators are the results delivered, along with the knowledge and expertise required to produce those results. Yeah, I know, hard work. But if anyone needs to be told hard work is a requirement of long term business success, they’re not cut out to be a business owner. Fair enough?

Many just reading that short paragraph are scoffing derisively. I get it — ‘Duh!’ right? But take a step back and review all of the businesses you’ve chosen to supply you with the product and service results you require. Are they all delivering you superlative results? Are you ecstatic with the value you’re receiving for the money? In your own view, how many businesses do you know of, whether or not you use them, that demonstrate superior knowledge and expertise while generating excellent results routinely? Go ahead, take your time, no rush. It’s a depressingly low percentage, isn’t it?

What’s the key question?

How do things work, exactly? That is, given the results you plan to deliver, how do you make them happen? Again, don’t scoff. Simple principles are often extremely difficult to execute. For instance, in my town, San Diego, you can’t swing a dead cat without hittin’ a small neighborhood taco shop. They’re definitely not all created equal. In some it doesn’t matter what you order, it’s going to be exquisite. In others, not so much. How hard is it to make a carne asada burrito? A rolled taco? See what I mean? Unless you’re providing a service requiring a Ph.D from M.I.T., there are probably thousands competing for the same customers. The reason the top 5% are where they are is due to their ability to do what the other 95% are doing, but measurably better — and probably in many ways, on several levels.

They’re able to do this for a few Captain Obvious reasons.

  • Generally speaking, they’re far more knowledgable about what matters, top to bottom, than their competitors.
  • Their expertise, real expertise, resides at a level far and away higher than most in their industry – at least in their market.
  • They literally have thousands more hours of experience — successful experience — than their competition.
  • They deliver the bottom line RESULTS for which they’re paid.

People want results — the rest is HappyTalk.

Marketing experts wax poetic about their place in the process, a well deserved spot if they also produce results. Folks talk about branding, service, and convenience. I’m sure you know the drill well. But when the smoke clears, and the fruits of our labor are put up for all to see, will the typical business owner be proud? Or will they be a bit red-faced? Most businesses, I’d say the vast majority, produce one of two things — results, or endless reasons why the results are weak or nonexistent.

This isn’t rocket science

Everybody talks about bringing home the bacon, but few ever really deliver. Having both the knowledge and expertise to create results are indispensable when the agenda is to produce results. Experience? Obviously to be highly valued, but can be gained while doing– however, NOT without the knowledge and expertise. Failed businesses often find the real culprit was that faking those two factors simply doesn’t cut it. The public knows genuine results when they see it. They’re equally skilled at discerning bona fide knowledge and expertise.

You’re a business owner, or you are thinking of taking the leap and starting one. Are you all that knowledgeable about what it takes to make things work? Do you have the skill sets, the flat out, slam dunk expertise required? If you’re able to answer ‘yes’ without hesitation, my money’s on your business success. I was taught early and often that ‘success begets success.’ It wasn’t until I’d learned these lessons that I finally understood what it meant. In the business world, at least over the long run, success = results. The more often and consistently your business produces the results desired by customers/clients, the more success you’ll have. See what I mean?

This isn’t rocket science. But if it’s so dang simple, why do the majority of businesses fail so miserably?

It’s the difference between a simple concept and its not so simple execution. People will literally chase you down to pay for the results they want.

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4 Comments

4 Comments

  1. Joe Loomer

    October 15, 2012 at 11:15 am

    I was going to question the premise of “They literally have thousands more hours of experience – successful experience — than their competition.” Then I realized successful hours of experience didn’t have to necessarily be in the specific industry they are now operating in – but rather that experience could come from a previous industry or career, but carries over.

    • Jeff Brown

      October 15, 2012 at 1:25 pm

      @Joe Loomer Though thousands of hours of experience in a specific calling is what separates the merely good from the elite, your point is well taken. In fact, I’ll go a step farther. Dad’s firm was in San Diego, a big time Navy town. He never had less than three retired Chiefs workin’ for him. 🙂 Those guys always succeeded, and almost from their first day. They were often awkward and clumsy at first, but once they got their ‘sea legs’ they rocked. I once asked Dad why the Chiefs did so well. That’s when I learned that Admirals don’t run the Navy, Chiefs do. 🙂

      • Joe Loomer

        October 15, 2012 at 1:42 pm

        @Jeff Brown Navy Chief, Navy Pride

  2. Prest and Naegele

    November 20, 2012 at 6:16 am

    Very interesting article Jeff. I would also add planning next to the necessary experience. Here I mean not just the business plan but cost control as well.
    Additionally, some entrepreneurs believe they can do everything on their own, and keep the bookkeeping and do the accounting, while their time would be so much better invested in growing the business. And many lack vision, including financial vision.
    We actually wrote more on the topic, including business-failure due to the lack of succession plan and even rapid expansion in one of our articles: https://www.prestinaegele.com/why-do-small-businesses-fail
    Hope it helps!
    Andrew W.

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Peloton seeking to sell 20% of company amid long-standing struggles

(BUSINESS) Peloton has been on the struggling bus (or should we say struggle bike) since its peak in mid-pandemic 2020. Now they’re looking to offload.

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Peloton bike in front of large screen

Oh, how the mighty have fallen. In this economy, not even multi-billion dollar workout companies are safe. Despite workout startup Peloton being founded in 2012, Peloton reached peak popularity in 2020, after the Covid-19 pandemic forced all non-essential businesses to shut down, including gyms and fitness centers. Users could connect to classes at their convenience, and complete instructor-led workouts on their stationary bikes or treadmills, all from the comfort of their homes.

At its pandemic peak, Peloton was worth roughly $50 billion dollars, with its stock soaring by 440% in 2020. It’s been a bumpy ride for former Peloton CEO, John Foley. In 2021, the company faced a massive product recall, one for their Tread+ treadmill, which had faulty touch screens that fell onto consumers, and another for their bikes, of which 27,000 models received faulty clip-in pedals which resulted in user injury. Stocks fell from a 52-week high of $129 to just $17. A whopping 90% drop from its all-time high.

In February, Cofounder and CEO John Foley stepped down, following Peloton cutting 2,800 jobs. (In other words, 20% of their staff.) Foley, in conjunction with the board of directors, created a succession plan and appointed former Spotify CEO, Barry McCarthy, to head up the ultra-famous workout company. Peloton is also actively recruiting investors for a 15-20% Hey, Elon, if Twitter doesn’t work out, there’s always Peloton!) A deal like this could bring cash flow, and the change in leadership could re-inspire confidence in consumers.

However, Peloton is still far from out of the woods. Now that the pandemic is kinda sorta dying down, gyms and fitness clubs are back open, and, at least in the United States, we’re not facing imminent shutdowns, fitness fanatics want to workout in person.

They want the experience of going to the gym and working with a personal trainer in person. In addition, their competition replicated the Peloton experience, for a fraction of the cost. (with all of their equipment costing over $1,000, plus a membership that has to be paid monthly to access the classes.) Peloton is no longer growing, and instead faced a $439 million dollar loss, as compared to the $60 million dollar growth the previous year. Unfortunately, the forecast for the next quarter and the close of the fiscal year is no better. Leading some financial experts to believe that Peloton will never bounce back, and certainly won’t make a full recovery. Many investors worry Peloton was “covid stock” aka only ultra-successful as a direct result of the Covid-19 pandemic.

The future of Peloton remains to be seen. Will they find investors and bounce back? Will they file for bankruptcy and restructure? Or will they join ranks with companies like Blockbuster and fade into obsoleteness?

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Business News

Proven, clear-cut strategies to keep your company’s operations lean

(BUSINESS) Keeping your operations lean means more than saving money, it means accomplishing more in less time.

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The past two years have been challenging, not just economically, but also politically and socially as well. While it would be nice to think that things are looking up, in reality, the problems never end. Taking a minimalist approach to your business, AKA keeping it lean, can help you weather the future to be more successful.

Here are some tips to help you trim the fat without putting profits above people.

Automate processes

Artificial intelligence frees up human resources. AI can manage many routine elements of your business, giving your team time to focus on important tasks that can’t be delegated to machines. This challenges your top performers to function at higher levels, which can only benefit your business.

Consider remote working

Whether you rent or own your property, it’s expensive to keep an office open. As we learned in the pandemic, many jobs can be done just as effectively from home as the workplace. Going remote can save you money, even if you help your team outfit their home office for safety and efficiency.

In today’s world, many are opting to completely shutter office doors, but you may be able to save money by using less space or renting out some of your office space.

Review your systems to find the fat

As your business grows (or downsizes), your systems need to change to fit how you work. Are there places where you can save money? If you’re ordering more, you may be able to ask vendors for discounts. Look for ways to bring down costs.

Talk to your team about where their workflow suffers and find solutions. An annual review through your budget with an eye on saving money can help you find those wasted dollars.

Find the balance

Operating lean doesn’t mean just saving money. It can also mean that you look at your time when deciding to pay for services. The point is to be as efficient as possible with your resources and systems, while maintaining customer service and safety. When you operate in a lean way, it sets your business up for success.

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Business News

A well-crafted rejection email will save both your brand and your time

(BUSINESS) Job hunting is exhausting on both sides, and rejection sucks, but crafting a genuine, helpful rejection email can help ease the process for everyone.

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Woman sitting at computer with fingers steepled, awaiting a rejection email or any response from HR at all.

Nobody likes to hear “no” for an answer when applying for jobs. But even fewer people like to be left in the dark, wondering what happened.

On the employer side, taking on a new hire is a time-consuming process. And like a box of chocolates, you never know what you’re going to get when you put out ads for a position. So once you find the right person for the role, it’s tempting to move along without further ado.

Benn Rosales, the CEO and co-founder of American Genius, offers an example of why that is a very bad call.

Imagine a hypothetical candidate for a job opening at Coca Cola – someone who’s particularly interested in the job, because they grew up as a big Coke fan. If they get no response to their application at all, despite being qualified and sending follow-up emails, their personal opinion of the brand is sure to sour.

“Do you know how much effort and dollars advertising and marketing spent to make [them] a fan over all of those years, and this is how it ends?” Rosales explains. This person has come away from their experience thinking “Bleep you, I’ll have tea.”

To avoid this issue, crafting a warm and helpful rejection email is the perfect place to start. If you need inspiration, the hiring consultants at Dover recently compiled a list of 36 top-quality rejection emails, taken from companies that know how to say “no” gracefully: Apple, Facebook, Google, NPR, and more.

Here’s a few takeaways from that list to keep in mind when constructing a rejection email of your own…

Include details about their resume to show they were duly considered. This shows candidates that their time, interests, and experience are all valued, particularly with candidates who came close to making the cut or have a lot of future promise.

Keep their information on file, and let them know this rejection only means “not right now.” That way, next time you need to make a hire, you will have a handy list of people to call who you know have an interest in working for you and relevant skills.

Provide some feedback, such as common reasons why applicants may not succeed in your particular application process.

And be nice! A lack of courtesy can ruin a person’s impression of your brand, whether they are a customer or not. Keep in mind, that impression can be blasted on social media as well. If your rejections are alienating, you’re sabotaging your business.

Any good business owner knows how much the details matter.

Incorporating an empathetic rejection process is an often-overlooked opportunity to humanize your business and build a positive relationship with your community, particularly when impersonal online applications have become the norm.

And if nothing else, this simple courtesy will prevent your inbox from filling up with circle-backs and follow-up emails once you’ve made your decision.

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