5 Reasons Why Businesses Fail
The BIGGEST fear all entrepreneurs face is Failure.
It's almost paralyzing on some fronts, but the key to overcoming that fear is by being prepared to combat it on all fronts. Let's be honest, we wouldn't embark on this entrepreneurial journey if we didn't sincerely believe we could win, right? With that in mind I consulted the internet gods and they had plenty to say about failure, but let me give you the scoop on what Eric T. Wagner over at Forbes had to say about why 80% of you will fail at this #treplife (sorry, the numbers are what they are) and my thoughts about each of them. Reason #1: You are not really in touch with what your customer wants.
This should sound familiar. It's a tune I've been singing from Day 1. Validate your idea. Vet your idea. Ask people for feedback. Listen. Implement. Yeah I thought it sounded familiar. Yet so many of you don't and won't do it. Maybe you need a little guidance. If that is the case, seek it. But start with your customers first. Trust me, they have PLENTY to say about your offerings.
Reason #2: You are no different than anyone else. You don't know or even understand your unique value proposition (uvp).
What makes you special? Do you know? What is your value proposition? Do you even know what that is? If not, it will be a little difficult to articulate it. How are you different than everyone in the marketplace? If you can't answer these questions your business will fail. But we don't want that...so again, seek the guidance of someone who can help you identify your value. Also, the internet has a nice little chart that will help you sort it out as a well. Reason #3: You fail to communicate your value proposition in a clear, concise, and compelling way.
Well for starters, if you don't know your value proposition then you will definietly have trouble articulating it. But let's say you do know your uvp, are you communicating it effectively? Are you clear, and more importantly, is your story compelling? People will almost certainly always open their wallets when you compel them to. If you don't believe me, ask the guy who compelled 258 people to give him over $1,000 to buy a $8 burrito. Reason #4: There is a leadership breakdown at the top.
This is really just a way of the internet saying you suck as a #BOSS. I kid. A lot of times this breakdown is a direct result of you taking on too much at once. I'm definitely guilty of being #teamdoingtoomuch, and it wasn't until I got a clear focus on one goal at a time did things start to turn around in my business. Being able to identify what is important in your business and then being able to communicate it effectively with team members is critical for success.
SN: You need team members. I know it sounds sexy to say you're a solopreneur, but your business (and sanity) is probably suffering because of it. Teamwork makes the dream work. Get yourself a team, even if it's a team of two, you will still get more done. Reason #5: You do not have a profitable business model aka you have no idea how you will make money.
This is obviously the most important one of them all. You can have numbers 1-4 locked and loaded, but if you have no idea how you will generate revenue, then your business will of course fail. Saying, "I will sell such and such" is a not a profitable business model. How will you acquire customers? What platform will you use to sell to customers? Who are your business partners? What are the costs associated with running your business? Etc, etc, etc.
I could go on forever regarding all 5 reasons citing the personal experiences I've had with the above, but I'd rather address the elephant in the room: Capital. Money. Moolah.
I know some of you are wondering why "a lack of capital" is missing from the list. Well let's think about it for a second; how many businesses have been given major capital infusions but still had to close their doors, probably 80% of them...and you know why?
Because having money is not enough.
You absolutely NEED to know what to do what the dollars, how to give your customers what they want, how to generate revenue and how to grow at a sustainable pace. Throwing good money at a bad business model isn't going to buy you success. I know this firsthand. I've experienced it as a business owner and I've seen it with many of the clients I've coached. A lot of what you need to combat the reasons above can be found online.
You could do the research, consult your local Chamber (we have an amazing Chamber of Commerce here in Jax) or find a course to walk you through it.
But whatever you do, don't bury your head in the sand and hope that your business will improve, because it won't. I assure you, it won't.
Always remember treps, just because a road is less traveled, doesn't mean it has to be traveled alone. Ask for help.
P.S You can find Eric's article HERE.