Written By Gordon Tredgold, Founder and CEO, Leadership Principles; Edited By Doug Burson, Sphere Marketer & Analytics
5 Regrets of a Failed Entrepreneur: What I would do differently.
80% of new businesses fail – often for completely avoidable reasons.
Others fail because of a lack of organization, preparation, or a good understanding of what takes to run a successful business.
When it happens – there is always a feeling of regret for things that, in hindsight, you would do differently if you had the opportunity.
Here are 5 Regrets many failed business owners experience.
1. Didn’t do any market research
The number one reason startups fail, which accounts for 42 percent, they’ve created a product or offered a service no one wants. It’s great that you love your product, but if your customers don’t want it, then you have no business. Do your market research. Find a problem you can solve and offer a product that solves it.
2. Didn’t know who their customers were
This one never ceases to amaze me. You would be surprised how many entrepreneurs, when you ask them who their ideal customer is, can’t give a clear answer. Or, even worse, they tell you that everyone is potentially a customer. If you don’t know who your customers are, then they probably don’t know who you are, either, which makes it difficult for them to find you and buy from you.
The tighter you can define your ideal customer, the sharper and more targeted your marketing can be.
There are probably few feelings worse than seeing your business go bust with a sea of untapped customers available.
3. Didn’t use their network enough
Selling to family and friends is hard. I know from my own experience that it doesn’t feel quite right, or it can feel like you’re asking for charity. But there are two quotes every business owner should remember.
“All things being equal, people will do business with and refer business to those people they know, like, and trust.” –Bob Burg
“Your network is your net worth.” –Tim Sanders
Your network is an invaluable source of leads and should not be overlooked, as they probably fall right into that know, like, and trust category and will be a great source of referrals and potentially direct business.
4. Didn’t focus on sales enough
Sales is tough, very tough, and many of us, myself included, would much prefer to work in the business rather than on the business.
But spend too much time working in the business and pretty soon you will be out of business.
No sales, no business. It is as simple as that.
It’s so obvious when you are looking back over the wreckage of your failed business, but sometimes we do not see it because we are so involved. Every business owner should set clear sales targets that are aligned with the overall business goal. These need to be monitored closely, with any necessary adjustments made quickly if we want to be successful.
If you’re not aggressive about sales, then you don’t have a business. You have a hobby.
5. Set prices too low
When it comes to selling services, it’s easy to fall into the trap of selling on the basis of cost rather than value, often using a simple cost-plus pricing model.
However, this puts you into the category of trading hours for dollars, which, while OK, is probably not going to set the world on fire.
You should look to price things according to the value that you can bring to the customer rather than just the cost of doing the work.
It’s good to be focused on revenue, but you also need to understand your profitability, as it’s profitability that determines the viability of your business. It doesn’t matter how many widgets you sell if you’re selling them at a loss. You will go out of business.
Richard A. Bendis is the Founder, President and CEO of Innovation America (IA), a global innovation intermediary focused on accelerating the growth of the entrepreneurial innovation economy Internationally and in America.
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