Why Your Business Will Fail
Author: Lucy Rosen
What an awful title, right? It’s just that every article about business success is full of how to be successful—how to be sure your business stays solvent. No one really wants to talk about why you are going to fail…except me.
Your business is going to fail for a number of reasons, but the primary reason will be because of you. (Sorry, it’s true. If you start and own the business, the buck stops with you…so if it fails, yep, it’s on you.)
There is good news though. Like everything else in life, once you know what you may be doing wrong, you can take the steps needed to fix it before it’s too late. So, in an effort to help you get on the right track to launch or grow a successful business, here are the top 10 reasons why businesses fail (and what you can do to avoid these common pitfalls.):
1. Trying to operate without a well-thought-out/developed/written plan. Ever take a long road trip without a map? Get lost along the way? Spend money you don’t need to at hotels or restaurants because you got lost? Look at your plan as a “roadmap” for success. If you plan your business, you know you are starting at point A and want to end up at Point B. Your written plan (which you’ll access countless time throughout your “trip”) will tell you exactly how to get there.
2. Not having enough working capital for what you need to do to start and grow your business.
3. Having the “Field of Dreams” Mentality. Yes, it works in the movies, but the idea that “if you build it, they will come” unfortunately doesn’t hold true for most new businesses. You need to know your market—who they are, where they come from, how to reach them, what to tell them and what they need to tell you.
4. Thinking you can do it all by yourself. Yes, you can do your own accounting if you are an accountant, but you can’t do your own legal work, accounting, marketing, advertising, web design, customer relations and sales. No one can do it all—no one is an expert in everything. Acknowledging, accepting and accommodating this early in the formation of your business model is critical and can save you the unfortunate task of trying to “undo” mistakes made by trying to do it all yourself.
5. Thinking that because you place a few ads and send out a press release to announce your business, that you are set—that your new business is ready to rock and roll and you never have to do another piece of marketing again. Not only is this incorrect, but “taking a back seat” after initial launch marketing activities can often make the difference between staying competitive and being crushed by your competitors in the marketplace. You must constantly stay top of mind to stay relevant. How do you stay top of mind? It’s all about visibility. And if you’re not visible, trust me—your competitors are.
6. Thinking that going to every networking meeting, Chamber meeting, Rotary, etc. and handing out your business card to all the attendees is networking. It’s not. If you want to network, you must bring something to the table other than your card and your sales pitch. Networking and developing relationships is not sales.
7. Overpromising and under-delivering. Self-explanatory, of course, yet this is still one of the biggest mistakes enthusiastic business owners throughout all industries make. You’d be surprised at how setting realistic expectations and then meeting them without an issue will delight those with whom you do business. And imagine the excitement (and goodwill created) when you go “above and beyond” what you say you’ll do!
8. Not planning for slow times. There are cycles in every business, whether you are service, retail or manufacturing, and you need to know what they are so you can be prepared. Nobody does well when hysteria sets in.
9. Lack of leadership skills. While this may not be all that important if you plan on remaining a solopreneur, if you are looking to hire and manage a team of employees, you need to be an effective leader. Most important, you need to lead by example. Don’t know how? Learn.
10. Lack of passion. Your business will fail if you aren’t passionate about what it is and what you do on a daily basis. Passion is what keeps us moving and grooving. It’s what keeps us motivated and excited about facing each day with each new challenge that business ownership brings. Passion for success. Passion for doing it better than other businesses that offer similar services or products. The passion you bring to the table—or lack of—is usually pretty noticeable.
There are other reasons for business failure including thinking that your hobby would make a good business because you like doing it, or thinking that just because you spent X number of years doing something that you are equipped, capable and ready to start a business. In today’s complex and challenging marketplace, there are many reasons why businesses fail.
Perhaps Malcolm Forbes said it best, though, when he said, “Failure is success if we learn from it.” So, learn from some of the mistakes that others have made along the way, and set your business on the right course for success by avoiding these all-too-common pitfalls.
Lucy Rosen is president of SmartMarketing Communications- a marketing, business development and public relations agency that has been successfully working with start-ups and growing companies for over 30 years. Want weekly tips delivered straight to your inbox every Monday morning for 52 weeks? Sign up for the Monday Morning Marketing Memo at smartmarketingcommunications.com.