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21/09/2017

Hein van Spaendonck – Development through Failure Is Expensive And Not Just In Monetary Terms!

So, ‘Passion’ – whether for a product, invention or just delivering a great service – will get an entrepreneur on his way. But even experts who are passionate about their profession and get a business up and going, will have a 55 to 70% failure rate within the first 18 to 24 months. This is true not just in South Africa, but all around the world. There is nothing more disappointing and soul destroying than to see that start-up optimism and enthusiasm of new or even existing entrepreneurs crushed by business failure.

In the beginning of a business, everything is everybody’s job, but as soon as the business grows, entrepreneurs need structure and organisational assistance. This is not something everyone has learned or is taught at the University or Technikon’s Law or Engineering faculties.

And so many entrepreneurs find themselves in trouble – either they face the prospect of going
out of business, or they cannot grow beyond the initial start-up phase or sustain growth over
the years. The real problem is often that they do not have the experience or skill to set up a ‘sustainable’ business structure and model to make the business run effectively and efficiently, so that they can take real advantage of their passion.

It is often lonely to meet business challenges on your own, and many teams start to drift apart after a few years. On many occasions, I have sat in front of a team of business owners and asked them about their five or ten-year goals and I get three or more different answers.

Without this alignment, how can the business progress? When a business stagnates or starts to fail, the 2 am in the morning daily worry by the owners starts. On top of sleepless nights, the business fatigue is devastating to entrepreneurs and starts to affect their personnel, customers and families. It isn’t just new business owners that have this problem. In the current economic climate, there are many owners of established businesses lying awake at night wondering if they will survive another year, or how they will cover their expenses if their sales are stagnating. Standing still is running backwards…

What all these businesses need is a sparring partner to give honest and independent feedback, to resolve nagging issues, to assist in making difficult paradigm decisions and to apply tried and tested practical business solutions. They require an experienced entrepreneurial outsider looking in to take their business forward. They need a simple, but tailor made programme to instil a fresh and new vision with ‘traction’, and support to implement practical action steps to get to that vision.

It is a great pity that banks, investors and funders alike do not appoint an external business implementer as part of the initial funding costs or to intervene when businesses
get into trouble. This would save them millions otherwise lost through high business failure rates. In prior years, if funding came from the SBDC (Small Business Development Corporation) it was mandatory to appoint a business mentor to qualify for funding. Some banks took the trouble – even in the medium business market – to send in an expert to save these businesses.

Today they only do that for very large companies. There are organisations – like Thyme-Workshop – that are successfully implementing business turnaround and growth strategies for small and medium enterprises. But we need many more small consulting firms delivering services in this space, and they should be supported by business funders. In the long run, this is a much cheaper alternative to watching so many enterprises going out of business costing jobs so badly needed in South Africa.

Hein van Spaendonck is the Principal Consultant at Thyme-Workshop, and readily admits to being addicted to helping businesses succeed. He can be contacted on 082 905 5509 and hein@thymeworkshop.com. More information at www.thymeworkshop.com

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