John Linton Depending on which business 'bible' or State or Federal government statistics you subscribe to the failure rate of small start up companies is something along the lines of:
40% fail in the first twelve months
A further 30% fail within 24 months
A further 20% fail within the first 36 months
After 36 months very few fail but over 50% are absorbed/taken over with less than 1% completing a tenth year in business.
The reasons for the 90% failure rate in the first 36 months are variously given as:
40% have too little capital - or access to capital
30% have inadequate management skills and planning abilities
25% are unable to cope with a sudden/unexpected change in the marketplace in which they operate
The fourth year is generally described as the transition year in which the founders of the business have grown it to a point that is beyond their ability to continue to directly control everything and they must pass over a significant amount of day to day decision making and personnel management to people they've hired.
The fifth year is generally described as only being possible for the owners to 're-generate' the business by having the time made available by having put in place competent people to handle the operations they used to be totally involved in.
Exetel commenced offering communications services to end users in January 2004 and 2007 is our 'fourth year'; and 2007 is rapidly drawing to an end. This year I've done my best to hand over a great deal of the day to day operational responsibilities to the very able and capable personnel whom Exetel has been fortunate enough to recruit over the time its been in busness - I've clearly done an abysmal job of this key requirement and there is now very little of the year left.
I was forcibly reminded of this inability by a number of incidents over the weekend which disturbed me greatly. The problems were all of my own causing (which provided absolutely no comfort) and caused me to review what I actually had to do in the immediate future. It seemed to me there was an awful lot to do and I'd left precious little time to do it.
In some, before the stone age, psychobabble analysis done by McKinsey's for IBM back in the 1970s my test results exactly fitted their sales profile of "hunter/killer" and I apparently had none of the characteristics of the "nurturer". Not unexpectedly (psychobabble or not) I spent the whole of my IBM career as a rep or manager in new business and never had responsibility of maintaining established accounts. It was, in many ways a self fulfilling 'prophecy' and, irrespective of the accuracy of the initial assessment, 10 years of 'conditioning' made it observably 'true'.
This was undoubtedly the reason I have been prepared to act as a consultant to other companies over most of the past 20 years. It was that I got a great deal of pleasure and professional satisfaction from growing new businesses from 'ground zero' to effective operation and that I had never got any real satisfaction from beyond that point so I was happy to move on to the next start up opportunity. At the end of the growth phase in each of the assigmnets I took I moved on to something new for some other company - I don't have that option any more.
So I find myself having to do some really key things that I've never had to do in the past and, even allowing for the hyperbole of the psychobabble, am inherently unsuited to carry out and even more inherently incapable of maintaining.
I guess some old dogs do have to learn new tricks when there is no other option.
As we have some really interesting plans for Exetel's fifth year it's going to be a really important process to complete and, as with everyone who procrastinates, I've only got 3 of the 12 months left to do what's required.