Honestly, You Need To Stop Fearing Failure
As a small business owner, failure must be your best friend
The more you fail, the more lessons you are going to learn and advance with your business and life. Entrepreneurs only fail when they don’t learn anything from their experiences and don’t play the game of business at a bigger level.
In this article, we are going to take a closer look at what failure really means, we are going to talk about what are the most common reasons why businesses fail and 3 mindsets you can adopt today that will help you move forward easily and avoid some of the mistakes other entrepreneurs did before you.
First, let’s look at what Oxford Dictionaries say failure is:
Failure — the neglect or omission of expected or required action
This means that failure is not a person, is not someone who did things badly. Failure comes when somebody sets very high goals and doesn’t do enough action to achieve his or her goals. I believe that failure is someone who is too afraid to try something new because what other people would say about him. Everybody wants to be an entrepreneur or a business owner. But nobody really wants to start something new, something small. We all desire to have a business that is already successful and attract only good positive people. Unfortunately, in order to get to a successful business, we first have to start something small.
Failure — and learning from mistakes — is often an important milestone on the path to success. We have to change our perception about failure in order to help business owners stay in the game.
The Small Business Administration conducted research in 2014 and the results were astounding. Only half of new businesses survive the first five years and only a third get to reach the 10 years mark. You can view the study here. Forbes has darker research. According to Bloomberg 8 out of 10 businesses fail within the first 18 months. This statistics should not scare you. These statistics are here in other to motivate you to become one of the few businesses that survive and thrive in this day and age.
Why do small businesses fail?
1. Leadership
If you have poor management skills, if you micromanage people and don’t learn to trust them, then you are the only one responsible for your business success or failure. You have to learn how to get people that work with you on a mission and embrace your company vision.
What you can do to avoid these mistakes? Get a mentor, work with a coach who can hold you accountable for your dreams, study, embrace on a journey of CANEI (constant and never-ending improvement). If you want to study I recommend you go on Amazon and search for books from John C. Maxwell. You could also look at what other businesses are doing and try to improve on their systems.
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2. No uniqueness and no added value
You can have the best product in the word. If nobody knows about it, you will have hard times selling it and convincing people to buy it. Right now is not that easy to get people attention and when people pay attention your cash register rings. You have to develop a strong value proposition. Why is your product or service better than the competition. What makes your product or service unique? Only trying to sell your product on price is not working anymore. Now there are a lot of people who do product research online before they buy from you and guess what: there is someone online that is selling it cheaper than you do. Here are some other questions you could ask yourself:
- What sets your business apart from the competition?
- What is your competition doing worst than you? Better than you?
- What are the main benefits of your products for your customers?
You have to build a brand that will be easily recognized by your target market.
A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. — Seth Godin
3. Not eavesdropping on your customers
In an article I wrote last month I talked all about how listening to your customers can help you grow your business by creating better products and services for your market.
Here I am only going to talk briefly about some of the things you could do to get your customers to work in your innovation department.
- Ask people who bought from you if there is something they would love to be different about your product or how would they made it better.
- Search your name on Google, Facebook, Twitter and create alerts that notify you when your name pops up. Talk with people and really listen to them. Solve any problem they have and thank them if they say nice things about your business.
- Search for your competitors’ names online and see what people are saying about their products. If you can engage in a conversation and ask them what they like about that product.
- Survey people at least 3 times a year and embrace change. People are going to tell you what they want. You just have to listen and create it.
4. Not knowing financial management.
Many entrepreneurs when they first start out their business believe that they have to save money on everything. The first thing they cut is their salary. In a study done by Funders, 30% of the respondents said they take no salary from their business. This is a very bad thing because at some point they tend to forget that their business account is not their personal account. Spending money from that account can have bad circumstances over their businesses.
Many small businesses fail not because they have a bad product or bad marketing or sales forces. They fail because the entrepreneurs didn’t properly predict the amount of money needed to reach the breakeven and stability phase.
In order to avoid financial problems here is what you should do:
- Pay yourself a salary
- Learn more about cash flow, taxes, expenses, revenue
- Use professional business accounting services
- Keep records of all your business financial transactions
- Always live below your means in business. When you start making money always have 5–10% of your profits moved in a savings account. In business, you don’t know what happens and having a fund might help you in the future.
Fines are taxes for doing bad. Taxes are fines for doing good! — Andrei Rebegea
Mindsets that will grow your business
A. Do it, learn from it, adapt and succeed.
It doesn’t matter how large is your business. At some point, you will have roadblocks in your journey. Just take a look at Kodak cameras and BlackBerry phones. At some point, they were number one in their field. Now almost nobody uses them anymore.
B. Try, try, try, and then try again
It doesn’t matter how long it takes. Make it a rule to never give up and be an entrepreneur. A person that can be hit by any external or internal factors but always gets up. Learn from your mistakes, embrace change and be in pace with technology. Create something, ask for feedback and improve it.
C. See failure as an opportunity for improvement
When launching a spaceship, NASA has a plan for every letter of the alphabet. Be prepared! If solution A doesn’t work try B. If B still doesn’t do the job, go to C. Always analyze your business and work more on your business than in your business.
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