The secret of success is a grey manager
At least, that's the story behind a recent report. And weak management is to be avoided at all costs
Wednesday 15 January 1997
One key finding is that only one in five (19 per cent) of those businesses starting up will survive to their fifth birthday. It is also clear that wise, experienced 50-to-55-year-olds are more likely to survive in business than young, thrusting would-be entrepreneurs in their early twenties. On reflection the statistic makes sense: sing if you're glad to be grey.
New businesses with more than one proprietor stand a better chance of survival than solo operations, and previous experience in the sector is important. Interestingly enough, the study suggests that gender, possession of a degree and previous ownership of a business are found to be irrelevant to success or failure. And a period of inactivity prior to start-up does not seem to be an impediment. Faster growth prospects are associated with proprietors who previously held full-time jobs, were home owners and had O-levels. The slowest growth tends to be in catering and retailing, and businesses started at home.
As for business failure itself, the best source of information comes from the Society of Insolvency Practitioners. Earlier this year they delivered a stinging indictment of the managers of failed businesses: it is your own fault that you went bust.
The society, which represents 85 per cent of the country's insolvency practitioners, has discovered that more than one in five (22 per cent) of business failures last year were caused by weak management. The list of weaknesses spans fraud, over-optimism, imprudent accounting, obsolete products, eroded margins and over-gearing. Taken together this rogues' gallery of failings causes management to be ranked second in the table of causes of business failure.
The number one reason for failure is disappearance of the company's market. I would argue that all this translates into bosses' failure to take control, or to react to their business environment. As these particular failings are not part of the "exceptional, external and unforeseeable event" category, it must be the managers who take the blame. Likewise the "financing" category, as a reason for failure, probably suggests that managers were being unrealistic about what the financial institutions would support.
The author is senior teaching fellow at Warwick Business School.
Diving in at the deep end is no excuse for shirking the style stakes
Where should I invest my savings?
Mark Dampier: A safe harbour if the market recovery has overreached itself
'Scrap the trap': calls for change grow as banks are told to play fair with loyal savers
Bargain Hunter: Eurostar offers child fares for £1 each way to Paris, Brussels and Lille
Relaxed pensions rules: Guide to what they mean to you
- 1 Why I'm on the brink of burning my Israeli passport
- 2 War is war: Why I stand with Israel
- 3 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 4 World Cup 2014: Robin van Persie appears to give his bronze medal to eccentric Netherlands fan moments after being handed it by Sepp Blatter
- 5 Iraq crisis: How Saudi Arabia helped Isis take over the north of the country
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...
Day In a Page
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square