In his bestselling book How the Mighty Fall, Jim Collins discusses five things that have led to the fall of several big businesses and how one can overcome them. We'll look at each one of them in our next blog post.
In a world where the survival and business models of some of the oldest and most successful businesses is threatened, is there anything that an entrepreneur can learn from them? We can learn from their failures, can't we?
For any business to survive for a very long time and continuously post good results, it must have a solid business model. I have sampled five common practices of the greats that have sustained them over the years.
The business is greater than the individual
The problem with a good number of startups is that there is no marked difference between the business and its founder. If, for whatever reason, the key member of the business is unavailable, the performance declines and in some dire cases, such businesses close shop.
Successful businesses put a premium on systems and processes. In an event where a certain person is unavailable, they can be replaced and business operations will not be interrupted for a long indefinitely.
Bureaucracy isn't that bad
This, really, is a problem of the half full half empty glass.
Systems, processes and procedures are good. They can help one steer a business into greater heights. However, one should be careful not to make the red tape too long as this will kill the business in the long run.
Narrow your scope
As an entrepreneur you may be tempted to do so many things at once. Sometimes startups want to meet every possible need they have identified. Big businesses have succeeded over the years because they identified a single need and set out to meet it.
Do not spread yourself thin.
Have a money making plan
Every strategy you have for making your business stand out is good. But that is not enough. As an entrepreneur you need to incorporate your money making plan early on in your business. Do not be overtaken by events. Even when everything else is good, without making money, you will fold up!
Enthusiasm is not enough
Entrepreneurs start businesses because they are enthusiastic or passionate about certain things. When most startups are hiring, chances are they will take someone on board because of enthusiastic they are. While enthusiasm is good, it can be easily eroded. Think systems. Think processes. Think of things that can withstand a bad day!
To your success!