Maybe we are all reluctant to accept that our business might be failing but with high failure rates of businesses in many sectors we should make sure we are able to spot the warning signs and the act on them – not bury our heads in the sand and hope it will “be alright on the night”. That approach will never lead to a successful outcome.
But just because things might not be going to plan doesn’t mean your business or project is doomed – managing problems and risks is all part and parcel of a manager’s role – a risk management plan should be in place that will help to mitigate the very risks that might now be causing problems.
There are a number of warning signs that a business or a particular project is on a path to failure and if you spot these you should take immediate action. That said there is still plenty of optimism and plenty of success stories in small businesses and projects of all types and you do need to distinguish the normal lows and slumps of businesses and projects alike from the more serious indications that failure is looming. But with a careful risk mitigation strategy the vast majority of issues can be overcome if tackled early enough.
More start-up businesses and projects than ever are succeeding and returning more of the money invested in them. A key difference is that early warning signs are spotted earlier and acted upon more quickly due to the tools, software and apps available to support business owners and project managers. There are some great apps to help project managers handle all the information coming their way and make the right business decisions at the right time to avoid failure.
So let’s take a quick look at some of the earliest warning signs:
Not Employing the Best People
Are your employees or project team struggling to cope with the amount of work they have? Do they have the right skills, experience and qualification to help the business grow or the project be successful? Are your project managers certified so that your projects and business are benefitting from the accumulated knowledge of best practice? Cutting costs by employing unqualified or junior staff is a sure way to fail. Yet there are plenty of good reasons to become a project manager and it is a great career choice so finding or training the right staff does not have to be a problem.
Blowing The Budget
Budget blowing mistakes are unfortunately far too common – enthusiasm gets the business started up or the project initiated but it cannot carry it to a successful conclusion if the budget is poorly managed or simply not available to succeed.
There are plenty of good project management planning techniques available to ensure success but inadequate planning is common in business. If you don’t know the direction you are taking then it is impossible to reliably achieve it without a heavy dose of luck. Whilst that can, and does, happen for some businesses it is not the norm, nor a good way to develop and grow a business. And there really is no excuse for poor planning as there are plenty of easy planning and estimation techniques freely available.
Lack of control
Another early warning sign that a start-up business or project is heading for disaster is when there is a lack of control. This can manifest itself as continually changing the business model, the business goals or objectives – in a project it can be endless change requests to the point where the original project aims are lost or become irrelevant. When you receive a project change request always refer back to the original business case and if any change does not help to achieve the objectives it should not be completed.
There are many other signs that all is not well with a start-up business or when running a project such as:
- Poor Communication
- Lack of Progress
- Lots of Overtime
- Diversion of Resources
But just because these signs are present doesn’t mean all is doomed – just make sure you act on the signs and prevent them from developing into real problems.