Having been involved in the world of entrepreneurship and small business creation for more than 26 years now, I have heard, identified and pondered the plethora of commentary about small business/entrepreneurial startups that can often end up in failure.
We know in our entrepreneurial service provider world that we have many thousands dabbling, both seriously and perhaps, not quite so seriously in home-based ventures in the Okanagan as a significant statistical example of the entrepreneurial mood.
And, we might choose to say, “Where is the love?” if such small ventures feel and believe that collectively consumers are not assisting them to become successful.
I would like this week to offer some thought about why fledgling, first-time out of the gate entrepreneurs may fail.
First, genuine textbook entrepreneurs treat venturing as a milestone on the road to success.
They do count on learning from their mistakes, and use the experience to move them forward to the next idea and phase. But, then we ask, why not learn from the error of others without the pain and unquestionable suffering that goes with it?
Here are some thoughts to alleviate that discomfort.
No written business plan
Please don’t believe the fallacy that a well-prepared and thought out business plan isn’t worth the effort and paper it is written on.
The discipline of researching, analyzing and evaluating your new venture plan is the best way for you to make certain you understand how you may transform your perceived idea into an entrepreneurial venture, and to enhance the attractiveness of your idea to others who may wish to join your team as employees or investors.
Slim or zero revenue model
Even a non-profit venture must generate revenue or donations to offset operating costs that are inevitable.
You may have the solution to world hunger, but if your customers don’t have money, your new venture won’t go far for long.
We have to be honest with ourselves as every good venture idea will not become a booming success.
If everyone doesn’t need or want it, it doesn’t mean everyone will buy or acquire the service.
Market research and mountains of informal polling of friends, family and community will help.
Here’s one failure spot along the way—when young entrepreneurs come to me with their “life-changing idea,” I always tell them quickly that it’s always about execution.
If you are not comfortable making hard decisions and taking the inevitable risks, the entrepreneurial game may not be for you.
Too much competition
If you do not see competition on the horizon, it should pose a red flag—it may mean there’s no market for your product or service.
Remember, sleeping giants can wake up. So don’t assume that evident competitors are too big or slow for you to worry about.
An inexperienced team
This element is unbelievably important to you.
Investors fund people, not necessarily, ideas.
They always look for people with real experience in the domain of their start-up industry or market.
Find people to balance your passion and bring logical experience to your dream team.
Now here is the one item that we all talk about, read about and scares the pants off us and is a contributing failure factor.
A major resource is cash funding, but other resources, such as relevant industry contacts and access to marketing channels, are also vital.
Please be aware that sometimes having too much cash, not managed wisely, can be just as devastating as too little funding.
So, don’t quit your day job until new revenue is flowing to your venture.
Not enough marketing
I see this item crop into an entrepreneurial venture more frequently than you might imagine—having a slick word of mouth strategy for marketing just simply isn’t enough to make your product or service brand visible in the relentless onslaught of new media you are greeted with daily in our busy lives.
Even viral marketing costs real dollars and the time to go with it. Without effective and innovative marketing across the broad range of media, you won’t get the customers and your dream might just become a fading memory.
Giving in and giving up
Last but not least, one of the most common causes of startup failure is entrepreneurial giving in and giving up.
Despite setbacks, many successful entrepreneurs keep slugging away on their entrepreneurial vision until they find the success monkey on their shoulder. You can do it, too.
I wanted to close out the column today with this thought, based on the concept of failing forward, which happens to be the title of a book written by John Maxwell, a global leadership author and speaker.
Yes, the road to entrepreneurial bliss is a bumpy one with many a winding road, but let’s always keep in mind that whenever we are confronted with the bumps and turns in our quest for successful life change, that we keep moving forward and accept and embrace every step along the way as a positive one.
A reminder, please take a check at www.okanaganentrepreneurs.ca to learn more about our inaugural Okanagan Valley Entrepreneurs Conference, titled Finding Strength Within The Forest.
It takes place Nov. 22 and 23 at the Ramada Hotel, a premier networking and informational event for current and aspiring entrepreneurs in the Okanagan.
There will be informational exhibits and a series of presentations.
To register, see the website www.okanaganentrepreneurs.ca.