How to doom your business in 7 easy steps
Wednesday, July 03, 2019
Let’s talk about failure — because it’s easier to fail than to succeed. Here are seven easy ways to ensure that your business proposition will fail:
1. Dreaming, not planning.
Sure, most businesses begin with a dream — a dream of offering a unique product or service to a hungry market. But you can’t stop with the dream, or it stays an unfulfilled dream. A pipedream.
The dream has to be implemented with careful planning: who is the market, how to reach it, how to produce the product or service efficiently, how to price it correctly, and how to promote it. Dreaming is easy; planning is not. That’s why too many people stop at the dreaming stage and lament their dream never got off the ground.
2. Confusing a hobby with a business.
Your barbeque sauce may be the hit of every neighborhood get-together, but that doesn’t necessarily mean you’re the next Baby Ray. Or your afternoon tea with the ladies might have them raving about your scones, but that doesn’t mean a successful tea shop is on your horizon.
Meeting the demands of a large, paying market is much different than pleasing your friends and family for free.
I have encountered many travel agents who went into business (and ultimately abandoned it) because they enjoyed traveling themselves and had played around with booking trips for their family. Creating seamlessly perfect travel experiences for paying customers is more demanding, less forgiving, and requires knowledge of numerous financial and legal requirements.
3. Trying to do it all when you’re not good at it all.
OK, so your pies have won State Fair blue ribbons and you’re a great baker. Does that necessarily follow that you know everything about health and business licensing, production, accounting, marketing, promotion, communications, distribution, and customer service and can successfully operate a bakery all by yourself?
Being expert at one skill does not transfer expertise to everything else. If you don’t know it all (that’s all of us), surround yourself with people whose skills you lack but need.
4. Fear of sharing your project and bringing others into your fold.
I have seen many enterprises fail because the entrepreneur was afraid to share his business plan with others for fear his idea would be stolen, and he would lose control. Sure, ideas get stolen all the time (whom to trust is another story).
But more often than not, when you choose to go solo and eschew any outside experts, you risk losing everything because they might be the very people that can transform your idea to reality, offering resources and talents you don’t have.
5. Stealing, a close corollary to above.
When you steal people’s ideas, their resources, and shortchange them what they’re due, you’re a user whose reputation will catch up to you, sealing the demise of your business. It might take a while to catch up to you, but a reputation for dishonesty will cost you customers and partners and access to resources.
I once pitched an article idea in great detail to a business magazine; my rejection letter said it didn’t fit their requirements. Yet three months later, I saw “my” article in print, exactly as I had described, using the sources I had named, and even the same word count—only my name wasn’t on the byline but a staff writer’s. Clearly they had liked my article idea but assigned it to a staffer, ostensibly to save money.
Intellectual theft? Of course, but I figured if they had done it to me, they had probably done it to other writers as well—that kind of reputation gets around.
Sure enough, it took about a year, but the magazine did fold from lack of article ideas from outside writers. Bottom line, if you’re a cheater, others will be actively rooting for your failure.
6. Not knowing yourself well enough.
Starting and maintaining a successful business requires honest self-appraisal into your strengths, weaknesses, and internal and external motivators. When I hear prospective entrepreneurs ask, “How do you make yourself get out of bed to go to work for yourself and not putter around in your pajamas all day?” I know they do not have the internal motivation to own a business; they need the external motivation of working for someone else; fear of being fired and fear of losing a paycheck is what drives them.
If that’s you, that’s OK. Just know that you need a boss who is not you. Realistic self -assessment also gives insight into your weaknesses where you’ll need experts to complement you.
One self-employed service provider I know was happy doing his contracted work, but hated anything connected with office paperwork. Solution: he hired another person to answer his phone, make phone calls, write emails, do the invoices—all the office tasks that he not only hated to do, but was poor at.
7. Making snap judgments and decisions when you’re feeling panicky.
Desperate decisions make the worst decisions because you haven’t carefully analyzed all the repercussions. Every entrepreneur hits a rough spot; it’s the nature of creating something unknown.
But when you hit those rough spots, it’s time to revert to your plan (see No. 1), decide if any modifications are truly in order, analyze outcomes, and then stick with careful decisions. People who brag they “shoot from the hip” frequently shoot themselves in the foot, crippling their business.
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