Nobody wants to be a looser, to be on the losing side, to be attributed as the cause of defeat. And yet for as long as we can recall in history, we have always remained competitive.

I’ve not been feeling that well over the weekend, and as a result not really wanted to face the gusty winds and driving rain. Instead favouring a well-known flu remedy and to watch all three six nations games.

I particularly like the commentary these days, talking at length regarding the different strategies each team plays dependant on their opposition. And how “France are having to play a kicking game” against the Italians, and how “England will have to play a lot shorter ball against Scotland if they want to win”

In 2008, my business was significantly impacted by the news that Woolworths had gone into receivership. We had placed a lot of our ‘eggs in one basket’ thinking we were onto a winning thing, being able to move from providing support to Local and Regional Businesses, to having won our first National Contract.

I had never considered conducting anything more than very preliminary checks before we signed the contract (and why would you, this was Woolies!) I had thought. For just 57 days later, Deloittes to be announced as the receivers as they went into administration.

It took us nearly 3 years to recover from that, with many changes and sacrifices having to be made in order to survive. And from this, I deemed I’d determine 2 things:

  1. Where did I go wrong? (In not conducting sufficient due diligence to see this coming)
  2. Where did they go wrong? (After all this was Woolies)

However, what this led me to, was the study of more than 150 BIG BUSINESS FAILURES to determine:

What causes businesses to fail?

At 17.35Hrs on 9 February 2020 I typed into Google: “How to succeed in business?”. Within 0.54Seconds it offers me over half a Billion responses offering me guidance, advice, training, support, coaching, mentoring, finance etc

Moments later, I type “How to prevent my business from failing?” And it offers almost 1 Billion responses. Things like “American Express’s 7 Steps to prevent your business from failing”

  1. Business owners should lead, so others will follow
  2. Owners should take control of their businesses
  3. Put protecting a company’s assets above all else
  4. Start planning the future instead of predicting it
  5. Market the business to make sure it stays relevant
  6. Remember that the marketplace is a war zone
  7. Focus on general business principles instead of the specific industry


I think if someone is typing how to prevent my business from failing, the advice they are offering is rather belated and weak! If someone has the courage to type this into Google, they want answers not wishy-washy suggestions of what they perhaps should have been doing!

I finally typed: What causes business to fail, and (in comparison) only got 32Million responses, with the most prominent on page one, being Wikipedia offering:

“The most common reasons for business to underperform (low productivity, low profits) or fail (bankrupt, cease being) are as follows: Poor cash flow management. Absence of performance monitoring. Lack of understanding or use of performance monitoring information”

I’m not disputing this, I’m merely suggesting that perhaps none of the answers offered are actually HELPING me, just telling me “I’m not alone”, “I should have tried harder”, “It`s not my fault” etc.

So, back in 2011 after I sold my first business. I set out to find out what DOES cause businesses to fail? The study has involved the submission of hundreds of public access data requests, and sifting through thousands of documents, spreadsheets, companies house records with the help of 9 Data analysts to determine if there is a common cause of business defeat?

We’ve studied online and offline, traditional versus modern. And a multitude of different industries within both service and product based and determined that whilst there are a multitude of different reasons STATED as to why businesses fail. It actually falls to 3 fundamental flaws as the cause of the businesses eventual downfall.


 “Fail to plan, plan to fail”

In more than 40% of the businesses we studied (bearing in mind none of these were the locally chippy, but companies including Woolworths, Tandy, Norton Motorcycles, Toys R Us) there was no evidence of a coherent business plan.

Sure, all of the businesses had a plan. And yet there were a large number of businesses where the plan was either:

  1. Not sufficiently detailed as to determine HOW it was going to be achieved and not shared throughout the business, that everyone knew and understood what they were working to achieve.
  2. Woefully out of date. It may have been constructed the last time the business had been seeking funding, but not kept up to date and amended since this time and failed to accurately reflect the current state of the business, the current environment it was trading in or the opportunities available and perceived threats.
  3. Not being followed! The plan was there, it was up to date. And yet either a singular or multiple decision makers were running maverick within the business. Had not bought into the plan, and failing to adhere to it, in favour of either their own interests or that of others aside of the business.

When we surveyed Micro / SME businesses, it was revealed well over 60% already had this flaw within their business. In that they had either NEVER written a business plan (stating they have never required to raise funding and so not required!) Or that they have previously written a business plan, but it was more than 12 months old and had not been reviewed or update since then!


“The greatest investment every business can ever make, is in the recruitment, development and retention of its people”

There are 3 elements required to significantly and sustainably grow any business:

  1. People
  2. Systems
  3. Processes

It doesn’t matter if you are a new age online business or a more traditional Bricks n Mortar. ALL businesses require these 3 elements as they grow.

More than 50% of the businesses we studied had failed to put PEOPLE first.

I’ve seen countless examples of where companies have invested huge amounts of money on systems and processes. Hardware, Software, Country specific/Industry Specific Regulations. And spent time training staff on processes to ensure everything is done in line with both legal, regulation and system requirements.

And yet they still failed!

Yes, because we rarely build systems and processes that are build to grow, that are also capable and flexible enough to cater for shrinkage, conflict, economic downturns, changes in consumer behaviour, fashion, trends, etc.

In the businesses that failed, they had FAILED to recognise PEOPLE as the GREATEST asset to the business. Insisting they ‘work to rule’, ‘follow the system’ even though the system isn’t build for failure! As a result people become disengaged, they ‘switch off’ and begin ‘working to rule’. And THIS kills the business.

You see, at the heart of every business is a purpose, some values to which we all agree to follow and a culture that develops to nurture those values as we work to a common purpose. Change that culture, break those values and the heart within the business breaks and with it, the people’s desire to support it.

Meanwhile, in businesses that THRIVE in tough times, are the ones who recognise PEOPLE are more important than Systems and Processes. Where training budgets aren’t slashed and where development continues regardless. Where people have a vote, a say in how and when and where we do business, and as a result they are engaged with the process.

Now, if and when challenging times are faced, people ‘pull together’ they bend the rules, break the system, create new procedures. And as a result, the business pulls together and survives!

You should read: How to Hire a SuperHero

You should read: 11 Traits of being a great boss


That was far more complex, and for businesses that weren’t struggling or suffering. Businesses that had seen good rates of growth and were making good progress towards their aspirational goals. And yet, some STILL failed!

Want to know more?

Book a call and I’ll share the 3rd Flaw with you, and we can establish how many are present within your business, and how to prevent you from being number 154!