E's passed on! This parrot is no more! He has ceased to be! 'E's expired and gone to meet 'is maker! 'E's a stiff! Bereft of life, 'e rests in peace! If you hadn't nailed 'im to the perch 'e'd be pushing up the daisies! 'Is metabolic processes are now 'istory! 'E's off the twig! 'E's kicked the bucket, 'e's shuffled off 'is mortal coil, run down the curtain and joined the bleedin' choir invisible!! THIS IS AN EX-PARROT!!John Cleese & Michael Palin
Tuesday, 22 July 2014
Billy's Twenty-Eighth Law: When is it time to throw in the towel?
I was having lunch with George Hunter, the CEO of Small Business BC. We got to talking about the ways in which we honour small success stories. George made that point that sometimes it seems that we are honouring the survivors rather than those who are necessarily the best. Think of the archetypical small business success story.
I started my business after losing my job in the middle of a recession. All I had was an idea and my true desire to (fill in the business). It was a lot of hard work, but we persevered. The banks wouldn't even talk to me, so we took out a second mortgage on the house. Times were tough, but we put our heads down and just kept going. We finally got our big break when we made a big sale to (fill in your choice of either big company or level of government.) Then we continued our hard work and now have 50 employees in three different cities across the (fill in your choice of province, state or country.) Now I have a big house, nice car and a swimming pool filled with Champaign. (OK, that is an exaggeration.)
Unfortunately, we never hear about the small businesses that don't make it. I know from experience that those individuals work hard, they have ideas that they think were great. In fact, they may even be the ones who came second in the competition for the big sale. They are those who didn't survive.
Business fails. Sometimes, it is lack of competence. Other times it is failing to realize that the idea just is not viable. Other times, you are too far ahead of the market to achieve your sales targets fast enough to prevent from going out of business. It is rarely, in my experience, due to a lack of effort!
Alas, businesses, like cockroaches, are hard to kill. There is something deep within the entrepreneur that simply won't admit defeat. They beg, borrow and rob from Peter to pay Paul, just to keep the lights on. This often creates strains on family finances and relationships. The problem is that it is not hard work preventing them from success, yet the message is that hard work is the antidote regardless of the economic disease. It is simply nonsense.
Supposing five independent, sequential events must occur in order to ensure your business will succeed. Further suppose that the probability of success is 95% for each of those events. The probability of your succeeding is 0.955 or 77.4%. Reduce that probability of success to 90% and the probability of success drops to 59%. Each event has a high probability of success, but a lot of things must go right for the business to succeed! Some of those 'success factors' are beyond your control!
All entrepreneurs need to have someone who will provide them with the best possible advice with respect to the future direction of the business. They need someone who is trustworthy, honest and balances the line between support and clear direction. Finding this person or people is difficult, especially when you must make difficult decisions.
Failure is tough; although I heard a business story about a group of venture capitalists who invested in high potential people whom they knew would fail in their first venture. They knew that it was often the second or third idea which was the big money idea, and that the learning from the failure of the first venture was an investment in subsequent business ideas.
We all love the rags to riches story, that hard work is the key to success. There are many factors, including hard work, that account for the success of any new enterprise. Don’t be fooled by anecdotal information…hard work and persistence is not enough to ensure a successful enterprise.