The business and entrepreneurship series: Most common reasons why entrepreneurs fail – Part 2
REASON #4: LACK OF CAPITAL/RESOURCES
This stems from various things such as:
• Lack of cash flow
• Lack of financial track record
• Lack of saving for the raining day
• Lack of anticipating and planning for growth – With identifying timelines
• The inability to attract loans
• The inability to attract financiers and investors.
– Many businesses don’t need investors
– Many entrepreneurs have no records
– Many entrepreneurs have eaten up their investment money
– Instead of saving up, being prudent, disciplined and investing back their income into the business at the right time they spend it.
Investors always look out for prudence and financial discipline.
• Record keeping.
• Audited accounts
• Cash flow
• Personal funds Re-invested into the business
Lack of capital can jeopardize the day-to-day operations of a business. Eating all your business money is a MAJOR business killer.
Always differentiate between your Revenue and Profit. Many entrepreneurs don’t know what their true costs are. You must know your investment, cost and profit margin per product and service per time. You must keep your eyes on profitability at all times. Often times it is profitability that has boosted the fastest business growths. PROFITABILITY is a true indicator of how your business is doing
According to Small Business Trends;
• 40% of small businesses are profitable,
• 30% of small businesses break even
• 30% of small businesses are losing money.
REASON #5: LACK OF A CLEAR; TRIED, TESTED AND PROFITABLE BUSINESS STRATEGY AND MODEL.
Many entrepreneurs don’t do research into the terrain, business, market, and their customer before they start. Many entrepreneurs don’t do an assessment of exactly where the money is
– They don’t know what the market is willing to pay
– They have No idea about the gestation and waits period before successful conversion
– They have No waiting and staying power and the resources to survive – during the period when the biz is still blooming
Whoever is building a house must first count the cost before he begins building. Do an audit from start to finish and add contingency based on inflations rates and market dynamism
Have a Clear Vision, Mission, Objectives, Goal and a Proper implementation and execution plan
Do you have a short, medium and long-term Business Vision, Mission, and Objectives? Do you have a clear execution plan for your business?
Your execution plan should include your clearly stated vision and measurable goals, objectives and the results expected within specific timelines. This execution plan must align with and deliver on the Vision at the appointed time. This execution plan must leave room for flexibility in case the market changes or the customer needs change.
This is the point where I emphasize AUTHENTICITY. Ensure that it’s your own execution plan is original and bespoke to your business and it’s not copied from another business. This is where a lot of consultants set entrepreneurs and businesses up to fail
There’ are no two businesses that are the same regardless of them being in the same industry. Just as there are no two same people (DNA, Iris, finger print differ).
REASON #6: NO BRAND DIFFERENTIATION – NO UNIQUE DIFFERENCE BETWEEN YOU AND YOUR COMPETITORS.
Many businesses have no unique value proposition
What we call USP? Unique Selling Point
This boils down to the fact that you don’t really know your solution, who has a problem you’re a solution to, where they are and why you need them and why they need you.
This occurs in many businesses. Lack of a personal and business vision purpose, mission, values, passion, identity and an alignment of all these components leads to a lack of personal or corporate brand – It kills many businesses.
REASON #7: FAILURE IN COMMUNICATION – NOT COMMUNICATING YOUR USP & USING THE RIGHT COMMUNICATION CHANNELS
• Profile your target market
• Identify their language
• Their various access channels or platforms
• Then communicate your value proposition in clear, concise and compelling language (In their language).
The best form of communication is dialogue not a monologue
Many people talk at their customers not with their customers.
With a dialogue, you can hear their language first hand and respond in the same language and avoid what we call the BABEL EFFECT USE THE 5 CS COMMUNICATION MODEL
1) Have CLARITY – Communicate who you are and the value you give
2) BE Concise – Speak directly to your Essence (Be Concise about what you do)
In short straight language communicate your service, product and solution.
3) BE Compelling – Use compelling and powerful words to seduce, attract, inform, engage, entertain, educate, persuade and convert your customers.
4) ALWAYS Call to Action – Never communicate without ending with a Call to action.
What specifically do you want your customers to do
Where can they find you?
How can they reach you?
When do you want them to reach you?
5) PROPERLY CODIFY YOUR COMMUNICATION
Have coded words that are anchored to ONLY you. For example;
– The Catalyst, Coaching, Relationship and Marriage Expert, Help, Emotions, Therapist, Psychologist, Mind, behavioural Change.
– Tiger woods is Golf
– Serena Williams is female tennis
Once you Codify, when people see or hear it they automatically know that it is you.
Use the right communication channels for your products, services, customers etc.:
• Social media.
• Traditional media.
• Direct marketing
• Word of mouth (referrals)
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The Catalyst, Lanre Olusola
Africa’s Premier Life, Mind, Emotions & Behavioural Change Coach