Business Beat: Flip the Three Reasons You’ll Fail
I’ve got no money. The people I hired don’t do their job. No one buys my product.
These assertions represent three of the top reasons startups fail – money, people and market. Not only are these conditions for a new startup to flop, they are causes to flourish.
The exciting part of acknowledging possible failure risks, is the opportunity to use this knowledge to build a great venture that is close to fail proof. This takes though, reflecting on what it is about money, people and market that have such a big impact on business success rates.
Money is pretty straightforward on the surface; looking deeper is where the simple solutions lie. Businesses need money to develop but it’s not always a large line of credit that makes everything OK. A willingness to run lean and a commitment to spend money only where it makes the biggest impact can help immensely. An easy strategy is to actively assess where business dollars are going and take a moment to ask – do I really need this? Paying too much for things and an inability to negotiate great terms can lead to a disastrous bottom line.
People, oh people. Running a business means you must have healthy relationships with people, this may sound easy, often is not. Whether customers, staff or business networks – people buy people. Developing EQ (emotional intelligence) and servant leadership skills and acting on them helps put the focus on the needs of staff (and customer) before considering yours. Acknowledging people’s perspective, engaging staff in decisions and removing barriers to getting work done leads to high engagement. Simply, higher staff and customer engagement equals heightened success.
When product sales are low it means customers aren’t buying. Often a product doesn’t fit the market targeted, it may represent a declining market or the product is just plain mediocre. Delivering value and differentiating are important ways to address product market fit issues. Entrepreneurs almost always look from their own perspective. The big cue to entrepreneurs when sales are down – there’s a reason. Find out what it is, before it’s too late.
Sometimes businesses fail, and there is little that can be done. However, in many more cases pro-active self-reflection and an ongoing commitment to business creativity can mitigate a number of risks to establishing a solid model of success.
Creativity, fun and success in business takes effort and if you are clever you’ll make it part of your weekly business activities. Set up check-ins in your calendar on budget, people and customers, create a safe avenue for staff to bring you good ideas and bad news, build fresh product offerings often, and try to remove busy work and replace it with strategic action.
The MHC Entrepreneur Development Centre helps student and alumni bring their entrepreneurship dreams to life. We offer one-on-one coaching, training, mentorship and access to a diverse network of startup funding. To connect into our network email email@example.com or call 403-502-8433.
Christie Wilson is an entrepreneur outreach coordinator at Medicine Hat College and the APEX Entrepreneurship Incubator.