Why do 40 per cent of UK businesses fail?
Don’t let it be poor leadership. Here’s three golden rules that have helped entrepreneur, philanthropist and speaker Greg Secker, founder of Learn to Trade and The Greg Secker Foundation.
You’ve made it. You’ve taken a leap of faith and started a new business. You got into this game because you like to keep moving, to keep making progress. And that’s just as well – your business needs to keep changing, growing and moving forwards too. But that’s where so many business leaders fail.
We all discover pretty quickly that the world doesn’t owe us anything – not least when you set up a company. Working every hour God sends won’t save a doomed business based on a poor idea. But let’s say you do have a sound business model, one that’s already proven itself and is growing fast. You’re still not guaranteed to succeed.
That’s because most business leaders ignore a few essential rules, leaving their businesses to stagnate and fail. It’s a common mistake: four in 10 UK small businesses fail within the first five years. There are so many reasons why businesses go to the wall – from poor cashflow to a simple lack of demand. But in my long career I’ve seen other businesses fail because those at the top ignore these three golden rules:
1. Follow the ‘skimming stones’ principle: One of the hardest things to do when you’re growing a business is let go. At some stage, you need to allow others to make key decisions and take responsibility for things you’ve previously had total control over.
Once you accept that, you have to ask yourself a really tough question: ‘whendo I let go?’. So how do you decide?
There will be the objective, rational questions that help make the decision: do you have people with the right skills in place? Have you given them the training they need?
Yet, just like skimming a stone across a lake, it’s also an intuitive decision, based on gut feeling and judgement. Let it go too early and you lose momentum. Let it go too late and it’ll sink without trace.
You should always have a hand in the running of your own company (you need some control and influence), but you can’t do everything yourself. I’ve always lived by what I call the ‘skimming stone’ principle. Take aim, do the calculations, and then leave it to your instincts.
2. Make sure you delegate: The beauty of running your own business is having control over who gets hired. This means you can hire people you trust to do the job, and people you trust to delegate to. But more importantly, delegating is the art of avoiding burn out. If you try to take on too much, you’ll always crash and burn.
If you find yourself regularly saying ‘it’s easier if I do it myself’, then perhaps it’s time to change your mindset. Get the right people around you and aim for the Steve Jobs approach: hire smart people not so you can tell them what to do next, but so they can tell you what to do next.
3. Inspire and coach your team: You’re passionate about your business, but are your people passionate too? It’s your job to inspire and motivate them by explaining what you’re trying to achieve as a company. Listen to what business thinkers like Simon Sinek say: it’s about more than what you do – people buy your products (and employees buy into your ideas and company culture) because of why you do it.
I founded Learn to Trade because I wanted to help people achieve financial independence on their own terms. Let’s be honest – it means I make some money too, but that’s a by-product, it’s not my only aim. The thought of making more money won’t get you up in the morning year after year, the only thing that will is finding a real purpose. That’s why I set up the Greg Secker Foundation. I wanted to give back and I wanted my employees to understand why we are doing business, and how doing business can help other people and communities.
There’s so much more to running a business than these three rules, but each one is so easy to forget in the hustle and bustle of being a business leader. There’s no shame in business failure – after all, we only really learn through failure – but following these simple leadership tips will give you a fighting chance. So go out there and start fighting!