I believe that mistakes and failures are essential to eventual success. I also believe that there are some lessons that can’t easily be taught, and need to be learned through experience.
According to many studies, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. An enormous 80 per cent crash and burn, bang! Scaring, Right?
But why? What can we learn from the massive amount of failure with small business that we can apply to our own business aspirations?
There might be other main reasons to this bad news but, yes, at surface level the primary reason small and medium businesses fail is they simply run out of cash.
But trust me — the cracks in the foundation start well before the brutal day of financial collapse.
In the coming paragraphs, I will give you grounds for failure and more importantly, what you can do to avoid it happening to you:
Not really in touch with customers through deep dialogue.
An amazing thing happens when an entrepreneur sees a potential opportunity in the market, or dreams up a new idea for a product/service: they retreat to a cave.
In my experience, this is the worst move an entrepreneur can make because complete understanding of your customer is imperative to your success. If you read my preceding consultative article, I narrated that, service marketing is all about making dialogue with your existing customers. Listen — in my mind entrepreneurs must walk 1,000 miles in the shoes of their customers. Not 10. Not 50. One thousand!
Your customer holds the key to your success deep in their pain, behavior, dreams, values and the jobs they are trying to accomplish.
Markets are conversations. Dialogue is key. Real conversation with your real customers (is best for them) is your daily practice for your business to grow up.
Failure to communicate value propositions in clear, concise and compelling fashion.
Next up is the incapacitating disease called ‘failure to communicate’. Many entrepreneurs work hard to discover a point of differentiation then blow it because they do not communicate their message in a clear, concise and compelling manner. Many entrepreneurs can bleed to death through their failure to communicate.
Learn how to communicate better. As mentioned on point #1 above. If you truly engage in conversation with customers, then you’ll learn the language of your customer. If they speak Kiswahili, then please stop trying to speak English to them. Listen to the words they use and then use them right back at them. Do so through focus on these 3 points:
• Be clear (are your customers unclear about who you are and what value you bring to them?).
• Be concise (are you somewhat clear but go on and on in your messaging?).
• Be compelling (do the words you use persuade your customers to take the action you want them to?)
Leadership breakdown at the top
You see it all the time in the media. Enormous celebrities in the world tend to fell short from truly remarkable success because of their poor decisions. Right off the deep end goes another celebrity with unbelievable talent. Painful to watch, right! But that is reality.
Now believe me, startup entrepreneurs who go down hard and fail their reason for failure is sometimes the same. Self-sabotage through extremely poor decision making and weak leadership skills.
Please! Wake up to realise it’s your baby. You’re the founder and therefore the leader. It doesn’t matter if you’re a business of one, or 10. Lack the ability to strongly relate with people? Gain the skills necessary to do so. Struggle with anger issues? Solve it with anger management. Entrepreneurs who succeed spend time with personal development.