Probably every entrepreneur has an excuse for failure: investor pulling out, economic crisis, unreliable supplier ... All these things can happen but more often entrepreneurs fail because they repeat the same mistakes made by many others before them. And that really is unnecessary. An interesting article on this topic was published on Forbes.com. The author, consultant and investor Martin Zwilling, summarised the most common reasons for business failures that entrepreneurs do not want to admit.
1. No business plan
Every new business must have a business plan in writing. But if you think having a business plan is good for potential investors, you are mistaken: it serves mainly to identify how you can turn an idea into a profit.
2. Offering services free of charge in order to gain customers
Another mistake is to start providing products and services for free with a vision that first you need to gain a large group of customers and only then can you start making money. Marketing, technology and especially the people helping you cost real money.
3. Unrealistic business opportunity
Some entrepreneurs think that their enthusiasm and hard work can create a real market need: this, however, does not work. You should always build your business on a thorough market analysis and realistic opportunities to gain paying customers.
4. Dreaming instead of doing business
Dreamers come up with ideas but can't implement them. To do business, you must be prepared to take risks, manage uncertainty and responsibility. You need to be able to make very difficult decisions. Dreams will not be enough for your customers.
5. Misunderstanding the competition
The fact there are already a lot of players in your market does not mean you too will find a place. Much greater chances are available in markets with weak competition.
6. Neglecting protection of intellectual property
If you offer something really unique, invest in patents and trademarks. The competition, especially in the form of large companies, will very quickly wake up and possibly overwhelm you.
7. Missing experience
You can replace a lack of experience with great energy for work only partially. It always pays to experience something in a particular industry before you decide to enter it as an entrepreneur.
8. Insufficient preparation
After establishing your business it is already too late to start looking for funding, distribution channels or experts with the necessary skills. You should prepare thoroughly for the launch prior to actually starting the business.
9. Marketing a final product
No start-up company can afford to start promoting its product only after it is fully developed. Your marketing campaign should be launched even before your product development starts. Creating a product and getting sufficient attention via marketing takes roughly just as long.
10. Lack of persistence
Yes, you will be tired and frustrated. Successful entrepreneurs, however, do not give up even when their chances do not look good. Nobody has ever succeeded without overcoming large obstacles.
-kk-