We live in a world full of ideas, with the ability of many people to adopt them and turn them into a business. This attraction to entrepreneurship is important for the economy, it is part of what drives job creation, innovation and technological growth. For many people, the idea of starting their own business is a lifelong dream, but once they get there, they see how that dream fails. The Bureau of Labor Statistics estimates that nearly half of new companies will fail in the first five years. Josh and Kristy Alballero, the Texas team of husbands and wives who successfully founded their own company, IOOGO, share seven of the usual reasons why employers fail.
- Poor planning and insufficient research: Too often entrepreneurs fail because they jumped into opening a business without doing the right amount of research and planning. Planning establishes a game plan and a roadmap, research helps to understand the market and the potential customer, without this information, a business can fail quickly.
- It’s not the right market – it doesn’t matter how good an idea is if it’s not presented to the right group of customers. This goes back to planning and research, and not to devoting enough time to getting to know the market and what specific customer base and target audience it will serve and attract the company to.
- Trying to do it all: When starting a new business, employers will think they have to take it all on and do it all for themselves. It is admirable to be willing to try to solve a problem, however, too often employers will try to solve or solve something that they simply do not have enough knowledge or the right skills to do. Trying to do too much, alone, leads to emotional, mental, and physical exhaustion, a reason many entrepreneurs will cite in looking back on why their business failed.
- Exit the course: Entrepreneurs often stray and lose focus on why they started the business in the first place. People often think they need to do more, all the time, to always try to grow and take on too many new projects to give the necessary attention to their business.
- Not having an open mind: not being open to new things, new perspectives and new ways of doing things can diminish the employer. Again, while it’s easy to believe that one’s own opinion and way of doing things is right, it’s not always so.
- Wrong or Insufficient Type of Marketing: Many people believe that marketing and advertising are the same thing, or that just randomly posting on social media will suffice. A company will not succeed if no one knows, too many entrepreneurs make this mistake.
- Establish measures of success that are too high: Entrepreneurs are often involved hoping to see a lot of profits or growth immediately. Dreams of being the biggest name in the industry right away are unrealistic, a truth many entrepreneurs don’t realize until it’s too late.
Believing in your own idea and investing in that success is not wrong, but to be successful as an entrepreneur you have to look at the whole picture. Planning, research, attitude, mindset, openness to criticism and new ideas, are just some of the ways entrepreneurs can set themselves up to succeed. Understanding why others have failed and trying to avoid these same mistakes is a step towards business success.