Finally, someone has put pen to paper and written an article on how to fail in business.

Thank God.

We all know the scary figures. Within the first year 80% of new business fail which means 20% don't.

And... after 5 years, 80% of the 20% that didn't fail, do fail.

Are you clear on that? Good, let's move on.

It's 80/20 rule. You know, the Pareto principal.

The what Principal?

Vilfredo Federico Damaso Pareto (July 15, 1848, Paris - August 19, 1923, Geneva) was a French-Italian sociologist, economist and philosopher and all round clever guy.

Wikipedia describes the Pareto principal as -

"The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many events, 80% of the effects comes from 20% of the causes" Disappointing really, we've failed to tell the world how to fail.

We're failures!!

What is a Business?

Many business owners DON'T have a business... if they don't turn up for work, nothing actually happens.

What they do have is a job

I would describe a business as a commercial, profitable enterprise that works with, or without you.

So... How Does One Fail in Business?

It's nowhere near as hard as it sounds.

The failure of a business is basically four stages.

Stage 1: The Excitement Stage.

This is where your romantic dream of owning your own business starts to become a reality. The sleepless nights & excitement filled days planning and doing all the things you need to do to get this baby off the ground.

If you've ever kick started a business you'll know exactly what I'm talking about here.

It's all pure adrenalin.

Stage 2: The Avoidance Stage.

This is the stage where you start avoiding the things that you don't like doing.

Things like cash flows, setting up accounts, learning accounting software, thinking about which software to buy, writing job descriptions, talking to bank managers, etc, etc. The list is endless.

Incidentally, this is the best time to interrupt the failure cycle and move back to the excitement stage.

Stage 3: The Excuses Phase

This is the stage where you come up with reasons, excuses & stories for why you didn't do the things you know you should have done to be successful.

Stage 4: The Blame Phase

This is the last stage in the failure process. This is the one where the dismal business results are externalized and they become someone else's fault.

We've all heard them.

I couldn't get the right staff, my suppliers let me down, my office was in the wrong part of town, etc, etc.

To summerise, failure is a result of four primary factors.

1. Wrong goals.

2. Unclear focus.

3. No action plan.

4. Mental barriers.

So there you have it, the blueprint to failure.

It's not so hard is it? After all, many have succeeded.

for many events, 80% of the effects comes from 20% of the causes"

80% of the effects comes from 20% of the causes"