The short answer is it depends on who you ask. In doing some research for this article I literally found dozens of “biggest problems” depending on what the writer wanted to sell me.
There are surveys that call out numerous external problems ranging from the high cost of health insurance, taxes, government regulations, and the list goes on.
In my current role as a business coach I find business owners and CEO’s frequently list their biggest problem as whatever is hot at the time I’m talking to them.
I decided to go with my own history on this one since over the years I seem to have developed an unfortunate and extensive history of dealing with problems.
I founded a value added logistics company in 1989 that grew rapidly from no sales and eight employees to sales of over $40MM with more than 600 employees in the U.S and Europe. I sold out of that venture after ten years and bought a small HVAC manufacturing company with a small group of investors and ran that for five years.
These companies were in different industries and on different growth paths but the problems I experienced were quite similar.
Currently as a business coach I see the inner workings of many companies in various industries.
So what are the biggest problems facing small to mid-sized business today? My version is as follows:
Cash –It’s hard to get and there is never enough. If you are a fast growth company you can rapidly outgrow your available sources, if you are an underperforming company you can’t get it. The majority of companies don’t manage it well.
Lack of a clear plan – the SBA says that over 50% of businesses that fail don’t have a plan. I can say from my 30 plus years of experience not only is that number conservative, buy most businesses don’t know how to plan. Lack of a plan worsens the cash problem by allowing you to waste cash chasing tempting diversions, and throwing money at problems.
Ineffective leadership – this issue takes many forms. In my experience it is frequently in the form of depth of leadership. The founder of the company is
hands- on and effective but has little or no management depth behind him or her. This eventually causes the company to stop growing and e
ventually could lead to failure.
Sales / marketing effectiveness– this leads back to planning and leadership. Many companies have not taken the time to decide what their USP is. They try to compete in conflicting areas, such as lowest price and highest service. One takes away dollars and the other adds cost. Part of the planning process should include a very clear answer to one simple question, “with all of the products and service available to my customers why should they buy from me?”
Lack of execution– this may be the biggest of all. Research has shown and my own experience backs up the following facts:
- Over 90% of strategies that are developed are never executed.
- 75% of improvement projects fail.
- 85% of leaders spend less that 1-hour per month on strategy.
- Over 90% of employees don’t know the company’s strategy. (This is a direct result of top management not documenting and communicating it)
- Well over 90% of organizations don’t have meaningful performance measurements in place.
One thing all of these problems have in common is they are all internal and within the control of the management team. Business must look internally for problem solutions and position themselves to survive in an increasingly global and competitive economy.