The number one reason that small businesses are not profitable is waste. Yet all too often, business owners procrastinate or become too complacent with the operations of their business and look for any reason to blame for their lack of profitability other than themselves, according to George S. May International.
A new survey of 1,000 small business owners across the United States by management consulting firm George S. May International found that 45 percent of respondents said their businesses are not profitable. Sixty percent of all respondents cited the economy as the number one reason they are not profitable or as profitable as they could be.
“Many business owners feel that the recession is to blame for all of their woes, but that’s simply not the case and is actually part of a bigger problem,” said Paul Rauseo, managing director of the George S. May International Company. “There are plenty of small businesses making money in this economy because they are taking care of the business side of the business – controlling costs and increasing productivity.”
Aside from the economy, 29 percent of respondents cited competition within their industry as the one number reason they are not profitable; while 10 percent cited company inefficiencies in sales, finance, operations or labor; and one percent cited management.
“This survey speaks volumes to what we see with our troubled clients everyday,” Rauseo said. “These numbers should be flipped for a business to be successful. The economy and competition are convenient excuses and should not be the main reasons for a company’s success or failure; the management of the business and overall company efficiencies are the more powerful determining factors on whether or not your business will succeed or fail.”
The survey also showed that 45 percent noted their accountant as the primary professional advisor they consulted for business help, while 20 percent noted “other” without specifying, 18 percent cited their attorney and 17 percent noted a management consultant.
Rauseo said it is alarming that 60 percent said they are satisfied with their accountant’s help in making their business profitable, even though a majority of them are not profitable. In fact, 65 percent said their business is worse off this year than in 2008.
“Now is the time to climb out of the cellar of economic despair and identify wasted assets, wasted profits, wasted business, wasted services, wasted actions, wasted technology, wasted talent and wasted effort and fire your board of directors Mr. Complacency and Mr. Procrastination.”
“We hear many business owners say they just don’t have enough sales or there is a lack of advertising,” Rauseo said. “But really, they don’t have the business intelligence to tell them where their wastes are.”
About George S. May International Company
George S. May International Company is one of the most established management consulting firms in the United States. Since 1925, it has been helping business owners improve their operations, profits, efficiency and effectiveness. The company is headquartered outside of Chicago in Park Ridge, Ill. For more information, visit www.georgesmay.com.