How to succeed by preventing failure

An Idea Starting Technique for making a basic business plan

Here's what to do if you have to come up with a business plan and you don't know where to start. This business management idea starter clues you in as to the three top reasons businesses fail. This way, you plan your work in such a way as to eliminate the factors that make up the reasons for failure. Some call it fireproofing.

Even noted author and business professor Peter Drucker, who has published thousands of pages of business advice, admits that if you understand the three reasons businesses fail and can keep them from happening, you'll need to read no further.

The top three reasons for business failures are:

1. Failure to attract new customers
2. Poor record keeping
3. Emotional financial decisions

Here's the quick step-by-step directions:

1. Take just three pieces of paper and allot one to each reason or category
2. Next, brainstorm on each reason and come up with ideas that will prevent failure. For instance, for the first category, you could plan new customer promotions at regular intervals. You could come up with articles about your business that would be newsworthy and create a public relations campaign. You could also speculate on an advertising and marketing campaign.
3. For record keeping and bookkeeping policies be basic and be careful in the way you keep records and make financial decisions. This is not an area in which to take big risks. Document all transactions and back up your documents. Pay bills promptly and take advantage of discounts. Charge interest if you allow customers to pay over time. Raise prices when your cost goes up. Attend to the details.
4. Do make sure that you have a full sheet of ideas. Don't worry about the details so much as the concept. You'll work out the details in the next step. Just keep coming up with raw ideas until each piece of paper is filled.

Now, take a well deserved break. Do something entirely different and let those ideas simmer on the back burner until after lunch or tomorrow. It's important at this point to step back and refresh your mind.

When you come back to the three category sheets you'll be fresh and able to look at them with a more critical eye. Here's the step-by-step on the breakdown:

1. Prioritize the ideas as to workability and cost. You'll want to keep as many workable ideas as possible. Let's say you have five to seven workable ideas per category.
2. Expand on each idea as to when it will happen, how it will happen, who will be involved in doing it, the anticipated cost, and the anticipated benefit. There needs to be a clearly defined benefit for each idea. Each idea should take about one to two typed sheets of paper.

Now you've got the guts of a workable business management and marketing campaign that will be a specific plan somewhere around 25 to 60 pages in length. Remember that by making a plan and 'sticking to the basics' you'll be miles ahead of the game.

Plan your work and work your plan.

Print this report using
your browser

Top of Page

Back to Free Resources