I have seen businesses struggle and I have seen businesses completely fail. Generally it is not because the business has a bad idea or the business owner isn’t good at what they do. I want to dive into the top 10 things I have seen that cause businesses to struggle or fail.
Get Your Focus Right
You can have the greatest product or service in the world but if no one knows about it, you have nothing. The same is true on the flip side. You can market your product/service better than anyone else, but if your product/service is no good, no one is going to buy. You need a great product/service and you need to let people know you exist through marketing. Develop a healthy balance between the two.
Cash is King
Cash is everything in business. If you have no cash, you are going to fail. Period. You need to develop a system to monitor your cash flow. In addition, you need to have a good grasp on your financials. It will help you make more informed decisions. If you need help with either of these, I know this great firm called The Quantify Group that can help.
This one bugs me so much and I see it all the time. You don’t need to spend $5,000 on your desk and $1,000 on your computer chair to try to impress people. Spend your money wisely and on things that can give you good return. Now if you have built a multi-million dollar business and want to get a nice desk or some nice furniture for your office, I get that. But for most people running businesses, this just doesn’t make sense and is a bad use of their money.
This is a tricky one because debt is often times necessary to kick-start your business or promote growth in your current business. You just need to be very careful how you structure your debt and make sure that you have a solid plan in place to pay it back. As nice and kind as your banker may seem, when it comes time to pay back your loan, they are going to get their money. Do it the right way and you will be fine.
All the Wrong Reasons
I am going to tell you right now, if the #1 reason for starting your business is to make a bunch of money, you are going to fail. Making a lot of money as an entrepreneur is a byproduct of doing something you love and are extremely passionate about. It is okay to try to grow your business and make a bunch of money. My point is money alone should not be the main motivation for being an entrepreneur – if there’s no heart there won’t be any success.
Why Buy From You?
Why would I buy your product/service if there are 10 other people doing exactly what you do? In short, the answer is ‘I won’t’. Now, you may have a similar business to others but you need to set yourself apart in one way or another. Typically this can be done in three areas: Quality, Price or Convenience. Figure out which one you want to focus on and crush everyone in that area.
People Drive Success
You need good people working for you. If your employees don’t buy into the vision you have created for the company, you’re headed for failure. Along with this, you need solid management that continues to drive home the vision and hold people accountable. This may be you or other leaders in your organization. Either way, make sure everyone is 100% on board. If they aren’t, they have to go.
Listen To Your Customers
While your employees are important, if you don’t have customers, you don’t have a business. Listen to what they are saying, good and bad. Adapt to their feedback IF they are the type of customers you want to work with. Why do I say that? If you have a bad client and they are giving you feedback on your product or service, take their criticism with a grain of salt. Listen to your top clients and prospects because they hold the key to your success.
This is another tricky one because expansion and growth is good. But it can also ruin you if you don’t do it properly. Just make sure you have a plan in place. Ever hear the saying “don’t bite off more than you can chew”? Enough said.
Too Many Hats
Most business owners are really good at what they do. A roofer is really good at putting on roofs. An attorney is really good at interpreting the law. It is important to be extremely self-aware of your strengths and weaknesses. Don’t try to do something you aren’t good at. Let me use my example above and make this very simple. The roofer should be hiring the attorney for legal work and the attorney should hire the roofer to fix his roof. Got it? Don’t try to do everything yourself. Have a strong team of people around you to handle the things you aren’t good at so you can focus 100% of your time on the things you are.
I want to challenge you to take a few minutes to reflect on the 10 things above and where your business stands in relation to them. Be honest with yourself. Sometimes we get so caught up in the daily grind that we forget to look at the big picture. Don’t let something on this list keep you from achieving your dreams.