SME/SMB Failure Facts & Figures

An All-Inclusive Reason for SME/SMB Business Failures

As said, many threats have been recorded as causes of business failure. HOWEVER, thousands of books and magazines don't mention the most important and overall reason - encompassing ALL the other causes of the failure phenomenon!

You see, the number one overall reason why thousands of small and medium businesses fail to grow or go out of business is the...

PASSIVE STANCE of business owners towards their business risks -

ALLOWING it to RUN RAMPANT through their businesses, and to...

EAT AWAY profits and potential profits!

A business risk is ANYTHING that has the power to eat your profits, i.e. any event, action, decision, lack of action or decision as well as any circumstance in- or outside of your business that causes or could cause PROFIT EROSION. It is a generic term for the many causes/factors/threats that have been identified thus far as reasons for business failure - no matter whether these causes were of strategic, operational, financial or legal nature.

SMBs focus, almost entirely, on how to profit from their business opportunities... and then get caught by the risks, forcing them to close their doors for ever! Our experience is that business owners make money... ONLY TO LOSE IT AGAIN. This is a heartbreaking but true reality.

Most SME owners pay little or no attention to their business risks (i.e. they fail to PLAN and ACT against the profit erosion agents in their businesses). In other words, they do not have adequate business strategies and systems in place to protect and grow their businesses!

This attitude can be found in many companies - no matter whether these companies are business start ups or facing enormous problems!

Even businesses that are APPARENTLY growing and successful (i.e. businesses achieving business success on the short term only) fail... because they ignore the same enemy as their "unsuccessful" counterparts, namely the profit erosion agents in their businesses! They only have the appearance of growth and success.

To sum up, these failed medium and small businesses:

Lacked a sound foundation of thorough business planning, profit protection and business developing strategies.

These companies performed extensive business planning on how to pursue (and profit from) their opportunities… only to discover, later, that their profits had evaporated into thin air because they neglected to perform thorough profit protection planning too (i.e. to enforce risk management in their businesses). They were unaware of the silent war against their profits… ignorant of the enemy eating their profits like hungry bears.

Didn't know how (or neglected) to identify and assess their current and potential business risks (i.e. the profit erosion agents in- and outside of their businesses).

Didn't know how (or neglected) to calculate the negative financial impact of these risks (i.e. the profit erosion in monetary terms).

Didn't know how (or neglected) to identify and assess current or possible countermeasures (controls) to minimize the occurrence or impact of these risks.

Didn't know how (or neglected) to calculate the cost of current or possible countermeasures (controls) - so as to determine whether or not their countermeasures were justified on a sound economical basis.

Didn't know how (or neglected) to design, implement and maintain adequate business strategies and systems (including policies, procedures, standards and structures) in their businesses; with the purpose of protecting and growing their companies.

For this reason we want to share with you the most important solution needed to maximize your chances of business success! Although old as time, this solution is practiced by only a few medium and small businesses across the world...

Go back to discussion (ONE all-inclusive business solution)...