Failing to deal with failure
pic courtesy of imageafter.com
This article was first published in the South African edition of Entrepreneur magazine as an opinion piece.
Eighty percent of all start up small businesses will fail within two years, right? Or is it 94% within a year? Franchised businesses are safer, are they not? But by how much seems to be a closely held secret.
Into this catalogue of failure and uncertainty a large infrastructure of very smart people and institutions devote huge amounts of money, thought, assistance and support to educate and support entrepreneurs to open up new businesses and grow existing ones. Banks vie for attention, great publications have large circulations, business coaching is one of the fast growing sectors. Against these supposed market results I have to ask: ‘why’?
One reason is that we individually experience much higher success rates than those quoted so universally. I have yet to find anyone associated with the SME sector whose clients’ exhibit the level of failure quoted. It seems that the failure rate only happens to the other guys.
Another reason is confusion about what constitutes a business failure. We identify the surviving businesses, not the failed ones. If only 6% of businesses survive and employ staff then what happened to the other 94%. Did they fail? Did the entrepreneurs die, emigrate, remain sole traders or close their companies when they accepted a job offer? Did they merge with another company or relocate offshore? We don’t know. Continue reading
Priceless
image courtesy of imageafter.com
In which of these products and services would you choose the lowest cost option over all other considerations?
- Legal services
- Fast food
- Motor vehicle maintenance
- Carpeting
- Wine
- Computer printers
- Office furniture
I would guess most people will answer ‘none of the above’. We value our safety, working environment and enjoyment to highly to compromise.
A scenario
Now picture this all-too-frequent scenario: you are called out in the early hours of the morning to your business. There has been a break in. With a sinking heart you see the smashed security door, notice that your delivery vehicle is missing (it is subsequently found abandoned and burnt out) and the premises are a shambles. All the computer screens are missing and so are the servers – a terrifying thought strikes; are the backups up to date? Will they work? Continue reading
The Ponzi Scheme
pic courtesy of imageafter.com
The discussion about the Ponzi scheme allegedly run by Barry Tannenbaum and possibly others has been extensive, but one significant point seems to have been missed entirely, and that is the morality of the scheme let alone the legality.
From newspaper reports the scheme apparently promised returns of above 200% per annum by importing the Active Pharmaceutical Ingredients or API’s and then selling these at very high margins to drug manufacturers Aspen, Adcock Ingram and others. Lots of high profile people like Sean Summers former CEO of Pick ‘n Pay and Norman Lowenthal former JSE chairman have been reported as being among many prominent and wealthy people who were apparently were duped into ‘investing’ large sums of money, as were many ordinary investors. Allegedly the transactions with the drug companies were fraudulent, with forged documents, and the returns of 200%+ pa were paid by using new investor’s money.
There are many grins at their expense – how could they be taken like that? But isn’t there another question which should be asked? Continue reading
Follow Us!
