Why Businesses Fail to Reach Their Full Business Potential, or Worse


This article is one of many that will address the reasons who so many businesses fail to reach their full business potential or worse. Through this and subsequent articles we will also address the root causes and most importantly what to do about them.

Most articles you read identify the following as the more common causes of business failure,

  • Lack of cash flow
  • Lack of profitability
  • Excessive debt levels
  • Bad debts
  • Market downturn
  • Economic downturn
  • Try and get help to late
  • No business plan

We would say that these are the symptoms and not the root causes. So if these are not the causes, what are the causes? And what do you do about them?

We believe that that it is a very fine line between a company not achieving their business potential (i.e. they are just existing) and business failure.

Many businesses just exist and because of this it only takes that one bad debt, a bad profit year etc. to break the camel’s back and cause a business to fail.

We will focus on why businesses “just exist “which to us is a failure to reach their full business potential.  We believe there is a significant opportunity to provide businesses with the tools to do something about it.

We accept that some companies are happy to “just exist” however this article is not for them as we believe most businesses would not be happy in just existing, it is that they just don’t know what to do about it.

So why don’t most business reach their full business potential?

The following is a list of what we consider to be some of the root causes for businesses failure to reach their full business potential or worse.


This is a very large subject; however there is a distinct lack of knowledge on the fundamentals of business i.e. people are taught technical knowledge but not the knowledge on how to run a successful business. And when they start in business they are so busy doing the technical work they have no time manage the business or find out how.

Reading reports on some of Australia’s biggest collapses you read number of times that the Directors “just didn’t know where the business was at “This is extraordinary for the supposed skills of the professional directors.

We consider knowledge falls into 3 categories,

  • Technical knowledge

The knowledge of the technical parts of the business i.e. plumbing for plumbers, chemicals for chemical business, etc. For us we don’t touch that because we assume everyone has the technical knowledge in their business otherwise they wouldn’t be in business. Technical knowledge is still the prime reason people start a business combined with the necessity or desire to own your own business.

However this is where owners spend most of their time i.e. their “comfort zone “

  • Management knowledge

This is where we deal with the true fundamentals of business in where we believe most of the problems start i.e. they just don’t know the fundamentals of how to run a successful business, they have never been taught,

They don’t know,

a)      Where their business is at now

b)      Where their business should be at?

c)       What to do about their problems and issues they are facing?

d)      How to build a successful business?

As previously stated we believe the common elements of businesses that just exist are,

  1. Profits are accidental i.e. profit one year not the next
  2. Sales are up and down from year to year
  3. Sales have stagnated
  4. Difficult to hold good staff, profitable when have good staff and not when don’t.
  5. Don’t have documented systems and procedures.
  • Entrepreneurial knowledge

What is entrepreneurial knowledge? It is not about becoming an entrepreneur but understanding and implementing the key elements of what makes an entrepreneur. All businesses must display the core characteristics and some of these are,

  • Being visionary
  • Being a dreamer
  • Imagination
  • Lives in the future not the past
  • In control of the destiny
  • Knowing what the end game is
  • Extreme motivation to achieve the end game


This we believe is a big problem in business and due to a fundamental lack of knowledge about management and entrepreneurial principles, which result of course in focusing most of the business on being the technician (the comfort zone).


Most companies we believe operate without systems and or procedures or if they do they usually have some documented procedures and not systems.

Systems are at the center of creating a successful business i.e. documenting systems that capture the strategies and actions that will make the business a success.

The companies that have procedures and are successful however usually have the systems in the owners’ head and these businesses are totally reliant on the owner for that success.

The core systems a company needs to be successful are,

  • How to win work
  • How to deliver the work
  • How to manage the money
  • How to manage the people
  • How to manage the business

All good systems are implemented through procedures and it is the successful integration of these systems that makes a successful business.


Most business owners or managers say they are busy and I have not yet met a lazy business owner or manger however they still aren’t achieving their full business potential why? Because they are working on the wrong things!

To be successful in business there must be an equal balance between the Technician, the manager and the entrepreneur. And most businesses, their managers and owners spend minimum of 80 % of their time on being a technician and not enough on management or the entrepreneurial elements.

What to do about it

From the above we believe to remove the barriers to a business achieving its full business potential you must,

  1. Increase level of knowledge on a permanent and ongoing basis
  2. Understand the critical balance between the technical, management and entrepreneur elements of the business.
  3. Increase your level self-confidence, i.e. get out of your comfort Zone through a focus on increasing knowledge and learning the how to
  4. Systemization of your business.
  5. Spend some time developing your own entrepreneurial skills.
  6. Don’t hesitate to get help, all businesses need help at all stages of their journey and don’t get it after it’s too late  

How does Simply Business propose to address these issues?

So you might think that some of the above might apply to yourself or your companies, then what can you do about it? Simply Business is being created to help you address these issues.  Our focus will be,

  • Research on the best methods, tools and techniques for business success.
  • Provide knowledge in an easily accessible variety of formats that are simple and quick to understand.
  • Help companies identify where they are at
  • Help companies identify where they should be at
  • Help companies identify gaps between where they are at and where they should be at
  • Provide a series of how to tools to help business and business owners to address the issues preventing them from reaching their full business potential ( i.e. gaps )
  • Provide the knowledge and how to in a variety of delivery options to suit budgets and needs of most businesses.

In very brief terms we believe the formula for success is


We will work on providing you with the knowledge, helping with your motivation and most importantly we will provide the “How to tools“, to help you make the changes necessary in your business to achieve your business potential.

Where do I start?

From the above the following are a few points to consider to start the process of changing the business from where you are now to where you would like to be i.e. “Business improvement“

  • Read our newsletter.
  • Join our business improvement club and come on our journey as we build material to help your business.
  • Attend one of our free seminars
  • Talk to us

If you would like more information, please Contact Philip Coombs on 0419 834 678 to have chat about your needs, or arrange a no obligation meeting to consider your options.

Or contact by email: phil@simplybusinessaustralia.com.au