Top Failures of Business Start Ups
I got an amazingly simple and true email from Score.org, a business that helps business owners get started with advisement, classes and such. It is a non-profit company that has helped me in the past and they have branches all over the country. I am not even getting paid by them to do this!
Here is a list of the TOP REASONS FOR NEW BUSINESS FAILURE. I think every one of them is DEAD ON!
- Failure to plan. Many entrepreneurs feel that if they build it, people will come. It seldom will happen this way.
- Starting as a single founder company. When you’re a lone ranger, you’re overloaded with tasks. You have full responsibility for everything. Objectively define your skill set? Then find people to be responsible for the areas you are weakest.
- Failure to evaluate cofounders. If your partners cannot do their assigned tasks, or cannot be trusted, then your business is bound to fail.
- Starting a business with friends and/or relatives. Friends are just that; friends. Relatives can be even worse. Starting a business on comradeship can be a blueprint for disaster. Business decisions cannot be made on the basis of friendship. Agreement of who is in charge can be difficult.
- No diversifying skill set. If all partners are experts in programming then who is going to do the operations? Who is going to do the sales? The marketing? Etc.
- Taking ego to the work place. Ego in the work place can be very damaging. Especially if the individual has a big one. In a startup, it is not “My way or the highway”. Instead, it is, “How can we all work together for the better good?” One with the large ego is not the most important person in the company. The vision of the company should be much greater than any of the founding partners.
- No pre-testing of the market. Without prior determination of whether your product or service is a viable option can lead to months, if not years of wasted time, effort, and money.
- Trying to sell everyone. When believe you have a net to capture everyone, you end up catching nothing. Identify and target your niche.
- Putting business expenses on personal credit cards. This creates a load of debt, usually at a very high rate of interest that must be paid personally should the business fail.
- Having delusions of how revolutionary your idea is. No business is that amazing. Few ideas “change the world”. It requires hard work and strong execution to become a successful start-up.