If someone walked up to the front door of your business giving away “success in a bottle,” would you take it? You may laugh or roll your eyes, but I’d assume that you might give it a go. What’s there to lose, right?
According to Bloomberg.com, 80% of businesses crash and burn within the first year and a half. We use frightening statistics like this to motivate ourselves — what can we learn from these companies? Sure, a percentage probably just runs out of money, that’s understandable. But we think there are more issues that arise before the finances collapse. Here are our top 3 reasons businesses fail, and what you can do to keep your business from being a statistic.
Reason #1: You Put Your Dreams Above Your Customers
The secret to a successful business is the same as that of a marriage — listening! Your customers hold the key to your business’ success, so listen to what they like and dislike. What makes them tick? What are their hobbies, dreams and values? Talk to your customers. Nathan Furr and Paul Ahlstrom say it best in their book, Nail It, Then Scale It, “Which would you rather do — talk to customers now and find out you were wrong or talk to customers a year and thousands of dollars down the road and still find out you were wrong?”
Reason #2: You Don’t Stand Out
We live in a busy, go-getter world that gets busier by the second. There are plenty of distractions and competitors all fighting for the same thing that you are — your potential customer’s business. In this dog-eat-dog world, it’s your job to make your company stand out. What sets you apart from the other businesses? What makes you unique? Figure out the true value you bring to your market.
Reason #3: Take a Look in the Mirror
It may be hard to read — but consider your leadership techniques. Think about sports headlines each week. We’ve all heard about amazing talent like Lance Armstrong, Barry Bonds or Mike Tyson making poor decisions that derail their success. Entrepreneurs’ names may not be plastered on every HD television across the country, but it’s the same, self-sabotaging decision-making in question.
As the founder of your company, it’s your job to lead it. Recognize where your weaknesses are, and build those up. Are you a poor communicator? Do some research on interpersonal communications classes. Anger issues? Take an anger management class.
Now for the good news— you can avoid these mistakes! It doesn’t take but a quick look down the main street in your city to realize that businesses succeed. With the right attitude and business-minded actions, you can not only avoid that expected first-year failure, you can find yourself leading a quickly-growing company with a bright future.