Most people who start a business have great intentions and ideals of how their business is going to succeed. We get caught up in the excitement and the logistics of the business that we can easily forget to seek to understand the pitfalls so we can avoid them from the beginning – before it’s too late.
Knowing what Not to do is just as important then knowing what to do. Understanding the top Ten reasons businesses fail will save you thousands of dollars and years of headaches.
This week’s blog is the first of a series of two on this topic.
- No Accountability. When you have a job, you answer to a boss. It is the job of your boss to set standards up front so you know what you are measured against and will give you consistent reviews so you know where you stand. If you don’t produce properly, you’re fired. When you are your own boss, you have no one to answer to, so it is very easy to avoid the tasks you don’t enjoy doing in your business, the ones typically critical to the growth and success of your business – #1 on the list – Selling.
- Not having a clear Vision of the Business and what the end game is for it – besides having it pay your bills and make you a millionaire. The most successful companies ALL had a clear vision of what they were creating. Think about it, if you were looking at a map but didn’t have a destination in mind, where would you end up? Exactly, you don’t know! So how would you determine how to get there?
- Not Having a Guide – or Doing it By Yourself. If you have never been in business for yourself (or even if you have), having someone by your side that has ‘traveled the path of business growth and ownership’ would be the greatest investment into your business and would give you the best ROI. It is so easy to lose money when running a business, so it is in your best interest to have someone guide you through. When it comes to business you can NEVER have enough Training, Practice and Coaching. If you are unsure where to turn or find a guide for your business, you can contact us to help direct you: Go to www.GettingResultsCoaching.com to complete a complimentary Personal Assessement. There is also a reading list of books I highly recommend on this site.
- Under Capitalization. Have you ever seen a business that didn’t last it’s first year? I’m sure you have as 50 percent of businesses fail their first year. A whopping 95% fail within the first five years! One of the main reasons a business will fail the first year is undercapitalization. It is expected to ’lose money’ in your first year of business (this is the hard truth). You have to have the finances to support the growth of business for the first year and you MUST include how much you need to survive personally. How will your personal bills get paid through this period? You can either count on your own personal finances to fund this, however I would recommend getting a business loan to help fund this. I use the term ‘lost money’ very loosely as you need to consider this period of time as an investment period. Like most investments, they don’t typically pay off the first month you hold them, it usually takes time. As will your business. That being said, it is possible to make money your first year. Plenty of businesses do it all the time (we are an example of one), as long as you do things the right way.
- Lack of Research for the demand of what you have to offer. You may thing your business idea is the greatest in the world, but if no one else does, I don’t care how good your business savvy is, the business is likely to fail. Like you were taught in school – Do Your Research!
Okay, so this is not the most fun or inspiring of business topics, but it is critical to cover. My commitment is to support the growth of successful businesses. Part of this process is covering what NOT to do. In the next blog I’ll round out the top 10 reasons businesses fail.
In the meantime, if you are looking for additional resources, feel free to contact us either on our website: www.GettingResultsCoaching.com or email me at: Lauren@gettingresultscoaching.com. In the coming months we’ll be adding many more resources to the site to help you out. Stay tuned to an incredibly valuable free resource being introduced soon!
Happy Days,
Lauren
