As business owners, you have a responsibility to ensure your business succeeds.
One way to do this is to understand the main reasons why businesses fail and then prevent them occurring.
So here are the top 10 reasons why UK SME’s fail and how we at Ripe typically help our clients overcome them.
| 1. |
Poor cash flow management, often associated with over-drawing
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- Cash flow forecasts and monitoring
- Tax planning
- Life balance
|
| 2. |
Insufficient understanding of market demands, competition, and customer needs |
- Market research
- Product portfolio analysis
- Competitor analyses
- Customer satisfaction surveys
|
| 3. |
Insufficient capital |
- Financing options: loans, grants, investments, including EIS schemes etc
- Plan and manage growth
- Investor-ready assessment
|
| 4. |
Failure to develop a robust business plan, (which can lead to unclear goals, strategies, and forecasts opportunities)
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- Vision setting
- Strategic SWOTS
- Business Plans
- Forecasting
- Scenario planning
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| 5. |
Poor financial management
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- Budgetary control
- Maintain accurate up-to-date accounting records
- Management accounts
- KPI’s – identify and track
- Mentoring and coaching
|
| 6. |
Over-reliance on key customers
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- Marketing plan
- Forcefield analysis on diversifying
- Four ways to achieve growth
|
| 7. |
Ineffective marketing |
- Calculate how many prospects need to arrive at your desired growth in sales and build a marketing plan to deliver that number
- Product surround
- Brand development
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| 8. |
Inability to adapt to change
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- Change success model
- Risk analysis (FMEA)
- Innovation
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| 9. |
Operational inefficiencies
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- Waste audit, (based on Toyota’s 7 wastes), aka profit improvement
- Personal improvement
- Leadership skills
- HR policies, including continuous learning and development; and share option schemes
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| 10. |
Legal and regulatory challenges |
- Listen to and act upon professional advice
- Read our newsletters!
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