Small Business Failure

1
Small Business Failure

• Reading the Warning Signs

2
Introduction

• Tom Cochrane, TKC Solutions
• Advisory Services to Small Business Owners
• Institute for Independent Business
• Non Profit
• Worldwide network of over 3000 associates

3
Small Business Failure

• Alarming yet incredibly consistent statistics
  from the US, the UK, Canada
• Failure rates in the 95 range in the first five
  years
• Why?

4
Why do people start a small business?

• Independence
• They are tired of working for someone else.
• Challenge
• Small business ownership requires a great deal of
  responsibility. Some people thrive on that.
• Prestige
• Small business ownership offers community
  recognition. First as a successful business
  operator, and later as a contributor to the
  economic and social welfare of the entire
  community.
• No Restrictions
• There are no restrictions and few prerequisites
  for small business ownership.

5
Why do people start a small business?

• In small business a large percentage of new
  owners are over 50 years-old. Most have been
  right-sized and they have their severance pay
  or early retirement in hand and are looking for
  an opportunity that doesn't carry age
  discrimination with it.
• Race is not a factor in small business. Neither
  is gender. As a matter of fact, women are
  starting small businesses at 6 times the rate of
  men.

6
Failure Points

• Start Up
• Owner Saturation

7
Owner Saturation

• Hustle is no longer enough
• Fatigue
• Questioning the Dream

8
Owner Saturation

• Marketing / Strategy
• Customers of all shapes, sizes and whoever bought
  first
• No idea of who they are, what makes them unique
• No focus on how to grow, where, with who(m)

9
Owner Saturation

• Operational Chaos without the owner
• No clue on how to hire
• No clue on how to incent people

10
Owner Saturation

• Financial and Operational Controls
• Quickbooks Phenomenon
• No instruments, no training for bad conditions

11
Owner Saturation

• Undercapitalized- WHY?

12
Owner Saturation

• Undercapitalized
• No idea on what their rationale is for growing-
  No plan, no market focus, just another (store,
  dry cleaner, trucker, manufactureretc)
• Without that, they wouldnt loan themselves
  money, much less ask for it

13
Start Ups

• Dreams , not plans
• All the same problems as owner saturation, just
  in embryonic form
• Corporate Background is almost completely counter
  productive for entrepreneurs

14
What We Do

• Institute for Independent Business created the
  Business Support Program
• Outreach program for owners
• Network of Experienced (Old) Associates

15
Business Support Program

• Owners Do not Fail due to
• Lack of Smarts
• Lack of Hard Work
• Help for what they dont know is hard to find
• Advisory Program as opposed to consulting

16
Cases

• Metals Industry
• Declining Market
• Trucker Start Up
• Plan for distinctiveness
• Schedule and targets for new equipment
• Software Consultancy
• Landscaper

17
Thanks For Your Attention

• Tom Cochrane
• TKC Solutions
• 503-635-7741
• WWW.TKCSOLUTIONS.COM
• Tom_at_tkcsolutions.com
• Referrals are always appreciated.