Why entrepreneurs fail: incompetence or bad luck.
Have you ever heard a business owner blame their lack of business success on themselves, or is it because of the banks, the competition, market change or some other similar reason, apparently beyond their power to influence? Rather like the sales exec who wins orders because of their own skills, and loses orders because of flaws in product, poor marketing, or price. Yeah, right.
The reality is that it is possible to fail as a result of bad luck – just – but in 99% of cases the reason is that the entrepreneur got one or more things wrong. Here are twelve of the most common entrepreneurial pitfalls to avoid:
- Over-confidence in your business idea
You think it’s a wonderful idea, and your friends and family all agree. But what do potential customers think? And will they buy in the sort of quantity that you think they will? It’s so easy to get carried away with what you perceive to be a ‘brilliant idea’, but a reality check is vital.
- Failing to test the market
There’s usually a way in which the market can be tested before launch. A product mock-up, a website created, a little test marketing, and see what the response from potential buyers is. A few £000s or even £00s spent now could save much more in the medium term, as well as heartache and wasted time.
- Inadequate planning and managing of cash
Businesses go bust when they run out of cash. It’s the be all and end all of business planning, especially in the early days.
This is the enemy of success – conversely a lack of complacency encourages business improvement, proactive listening to customers, keeping in touch with the market and reacting to change.
- Poor sales skills
Remember that people buy from people and, with very few exceptions, people won’t buy from someone they don’t both like and trust.
- Not understanding the importance of brand
Brand is one of the most powerful ways of differentiating your business and its product and services from those of your competitors. If you don’t think it’s important and one or more of your competitors do, watch out.
- Ineffective marketing and sales lead generation
The world (aka your target market) won’t beat a path to your door unless they’ve heard of you, and you’ve clearly communicated what you sell and the benefits of buying.
- Poor recruitment and people management
Nearly all businesses succeed or fail based on the quality and motivation of the people employed within them. Great people mean great products, highly effective marketing and superb customer service.
- Not working hard enough
You’ve got a certain skillset, experience and ability level, all of which you can improve over time. But time is not what you’ve got, therefore the harder and more effectively you work, the greater your chances of success. Never let it be said that you failed because you didn’t work hard enough – what a terrible reason for failure.
There are decisions that can be delayed (and are better for it) and some that can’t be. If the latter, make a decision and get on with it. You won’t always get it right, but most times you can learn and, if necessary, change route and recover. But indecision makes businesses stagnate and loses valuable opportunity time.
- Working too hard – business reliant on you
You can’t do it all, and you certainly won’t be the best person at everything, so learn how to employ top people and to delegate effectively, freeing up your time to run the business.
- Premature spending of money on personal life style
Sadly it does happen – the ego overtaking reality. Keep your spending on yourself to a minimum. Use any money you’ve got spare to invest in business growth, to make the business less reliant on third parties, or put it aside to help you through a leaner time.
By Paul Wallace. Read more at www.wallaceburch.blogspot.co.uk