Why Nine-tenths of Enterprises Fail

“The beginning is the most important part of the work.”

Plato

All business owners and even employees should think big and make plans for expansion. In order to start a job, a strong reason, in other words a source of motivation, is required. This part requires thinking big, and unfortunately most people fail at this step.

Ray Kroc, unlike most people, was able to think big and realize his plans. He got into the hamburger business. But if he had chosen another business, he would probably have done well there too. Many small business owners tend to keep their business small. Ray Kroc developed a system for his small business, then expanded his hamburger business into a huge company.

The triangle below is the one that Robert T. Kiyosaki often emphasizes in his books. The purpose of this triangle is to help focus thoughts and teach the eight main topics that will make a business successful.

Statistics show that, nine out of ten businesses fail in the first five years. Nine-tenths of businesses that can continue for more than five years end before they see the tenth year. Here is the 90/10 rule of money again.

Many business ventures fail because at least one of the eight sections in Kiyosaki’s triangle is weak or lacking in these ventures.

A Business Needs A Very Strong Mission to Be Successful

In the triangle, the “product” is uppermost; but it has the smallest area. The “mission” is at the bottom but is one of the three items with the largest area. Mission is at the base of the triangle. Undoubtedly, the most important item in this triangle is mission.

I’ve heard a lot of people who want to be entrepreneurs say, “I have a great idea.” These great ideas sometimes have a chance to come true. The world is full of great products that have failed. This is because the base of the triangle is not strong. When you ask those who want to be entrepreneurs about their mission, most of them answer you: “I’ll make money!” If the focus is on making money rather than enterprise, the result is likely to be disappointing.

Mission is the most important thing to the business. Mission is the soul and heart of a business. The lack of Mission, means the lack of power to tackle tough road to tread.

When the most successful businesses studied, you’ll see a well-based and solid triangle. Their mission is motivating, leadership is well executed, managers are competent and work in harmony, cash flow and finances are good, sales and marketing communication are effectively provided, the system established for employees works efficiently, legal documents and contracts are clear and understandable, and of course the product produced – as a result of all of them – very good.

The System Is a Major Difference Between Small Businesses and Big Businesses or Companies

Most of us can make more delicious burgers than McDonald’s burgers. But how many of us can build a better system? The system is a crucial difference between small businesses and big businesses. In small businesses, the owner of the business is the system itself. Things don’t work out in his absence. Many businesses operate in this way depending on people.

Big businesses and companies operate on their well-designed systems. Employees or leaders can change over time. However, thanks to the system, the same process continues. McDonald’s works the same all over the world.

When businesses with well-educated, high-salary, hardworking employees who still achieve little are analyzed, it is seen that these businesses depend on people. A system has not been developed for these enterprises. Even a business with well-educated and highly paid employees will fail unless there are well-functioning systems.Entrepreneurs are the people who have to build great racing cars. CEOs are the pilots of those cars. A great pilot can’t win a race with a bad car. There are very few people who produce racing cars and become their drivers at the same time. Bill Gates, Michael Dell and Steve Jobs are such people. We’ve seen these guys all building and driving excellent racing cars.

You may also read my THE DIFFERENCE BETWEEN YOUR WORK AND YOUR BUSINESS post if you are interested.

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