While I’ve not done too badly in life relying on my “plumber’s maths”, I’ve never been much of a number cruncher. Wading through mountains of statistics may sound like fun to baseball fans or economists, but I’ve always been more of a “doer” than an analyst.
That said, every now and again I see some figures that catch my attention. On this occasion, it was a report from the Office of National Statistics (ONS) on business births and deaths.
Released at the back end of last year, and republished last week, it showed that the number of new businesses continued to increase from 383,000 to 414,000, a birth rate of 14.6%.
It’s worth noting that, like many of the stats that come out of the ONS, its “most recent” numbers refer to 2015 and 2016, but they do show a consistent pattern.
The same can be said of the numbers that interested me more, the businesses that died between 2015 and 2016. The amount of deceased firms rose from 283,000 to 328,000, which is a more concerning statistic.
Now, there are lots of reasons that businesses die. Some naturally come to the end of their lifecycle, whether that be they close because the owner doesn’t sell it on, or that they have failed to adapt to changing markets – a subject I have unfortunately had the opportunity to write about on numerous occasions.
Sometimes, market conditions and, of course, the economy, can send fragile start-ups over the edge, but on more occasions than we’d all like, business deaths are self-inflicted.
I often meet aspiring entrepreneurs and enthusiastic start-up disruptors who are convinced their idea will not only change their lives, but the world of business. While I can’t fault their enthusiasm and I would never try and throw a wet blanket on an entrepreneurial spark, these people really want to run before they can walk.
Perhaps it’s the social indoctrination of the millennial generation that suggests that if you enter a TV talent show, or even a reality show where you sit around on an island trying to meet your next love interest you’ll become rich and famous?
This is obviously a broad-brush generalisation and, I know, there are some very hardworking and conscientious young and new entrepreneurs out there, but even these guys need to focus on the basics to make their ventures stay alive and out of the business graveyard.
There’s quite a famous psychologist from Canada called Jordan Peterson who has an interesting philosophy for young people. It’s called “Clean Your Room” and it’s beautiful in its simplicity.
Basically, his suggestion is that it’s strange that many politically-engaged young people are preoccupied with reorganising society and the world’s ills, when they can’t even organise their own bedrooms.
Therefore, if you want to change the world, be that socially, environmentally or in business, start from yourself and work outward, because that’s how competence is built up.
If you can’t keep your room clean what hope is there for the rest of your life?
And when it comes to business that includes making sure entrepreneurs are focused on achievable goals, have a strong understanding of the market they are entering or disrupting and have the infrastructure and access to advice around them to become the foundation of their enterprise.
Getting it right with the simple things at the very heart of a business will help to build confidence among customers and take a fledgling firm out of the incubator stage, so it can become a healthy young enterprise with a prosperous future ahead of it.
Flying off half-cocked at 100mph on blind enthusiasm expecting customers to trust, engage and trade with a business only creates a recipe for failure.
Entrepreneurs that can “clean their room” are the ones that will find their companies growing and away from the scrap heap of business failures.
Charlie Mullins OBE is the archetypal entrepreneur having started his business from scratch and then building it into a multi-million pound enterprise. From humble beginnings growing up on an estate in South London, Charlie left school with no qualifications, but after a four year plumbing apprenticeship he started his own firm, Pimlico Plumbers, which now generates a turnover in excess of £40m and boasts many well-known names among its many clients. http://www.pimlicoplumbers.com
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