We’ve all heard the “statistics”. “50% of small businesses fail in the first year” and “95% fail in the first 5 years” are bandied about on a daily basis. While I take these “stats” with a grain of salt, I do agree business is hard work.
My very wise accountant told me in the beginning of my business journey “Darnelle, if starting a business and making it successful was easy, everyone would do it”, and it stuck. Because it’s true. It ain’t easy. But if you go in knowing it won’t be easy, why still, do businesses fail?
Recently, I was chatting to a savvy, corporate friend considering leaving the corporate world to start her own business. Clearly thinking about what it takes to make it as an entrepreneur, she mentioned instances where fashion designers (brilliant ones) fail and other not-so-brilliant ones succeed, or the super talented furniture maker who only sells one chair a month.
So why is it these people who are clearly passionate, and leaders in their field, still fail?
It’s the bigger picture stuff.
Working with SMB clients over the last four years has taught me a thing or two about business. In fact, I’ve seen 4 distinct characteristics that consistently bubble to the top of a failing business. And being a genius (or not) is not a required prerequisite for success.
Lacking a business mindset
Having the right mindset is powerful stuff. Take the furniture maker and the fashion designer. Clearly talented, passionate and good at what they do, but failing. Why? Because they’re lacking the right business acumen to run their businesses successfully.
But that’s okay. If you lack business skills, but passionate and great at what you do, get educated. Call in the professionals. Get an understanding of what it takes to turn that passion into a business and treat it as such.
Thinking you can do it all yourself
One of the best things I did early on, was seek professional advice for things outside my realm of expertise. While I had the marketing covered, sourcing a great accountant who set me up with the right systems, processes and advice from the beginning has paid dividends.
And as my business has grown, so too has my team. Delegating and relinquishing ownership of certain tasks free you up to manage the vision of the business and work on the things that really matter.
Failing to plan
Is simply just planning to fail. Creating a solid business plan, cash flow forecast and marketing plan is key in laying the foundation for success.
Have a clear understanding of capacity requirements, competitor analysis and sales and expense forecasts set clear goals and direction. Having something tangible to work towards (and keep you on track) is invaluable.
Before starting a business, having a clear point of difference will build a strong brand from the get-go. A strong brand has razor sharp messaging and a positive brand experience. And this is what gets your customers banging down your door. Engagement and connection = customers.
Continuous marketing and the nurture of current and potential customers is what grows your business. In this market of competition, the “if you build it, they will come”, mentality, just doesn’t cut it. At K.I.S.S we say, “If you build it, give your customer a map”. And your marketing is (not surprisingly), the map to your product or service. Understanding your customers, the channels you connect with them on and the messages they need to hear to buy from you, is all mapped out in a solid marketing plan.
Ultimately the secret to a successful business is you. The buck starts and stops with the business owner and their ability to drive the business forward.
While being a genius might not be a requirement, I believe that passion, determination and a positive mindset is what keeps my business moving. As hurdles come and go, simply view them as an opportunity to learn and grow.Business & Finance Articles on Business 2 Community