Q: I have a lot of ambition and what I think to be a good business idea, but I'm also struggling with fear of failure and how I will be received. Before I take the leap and invest my time, money and heart into my business, I'd like to know: Are there some clear-cut reasons attributable to the failure of a new business venture?
A: There are so many variables involved when trying to calculate failure. Was it a lack of funding? Not enough research? Could it be a decline in your industry? Perhaps it has more to do with a flawed business plan? While it's only possible to measure reasons for failure on a case-by-case basis, there are some common denominators to a failed small-business launch.
The good news is, there's an abundance of resources to help you avoid these potential roadblocks (or business killers). Literally, each community, region, state and many federal government agencies offer more help and assistance than you could ever dream of. If you have a specific problem area, it's a few keystrokes away to find assistance.
Above all else, seek help and ask the advice of wise council, such as entrepreneurs who've weathered the storms. The best chance you have at success is by realizing you're not and should not be alone. "Entrepreneur" does not mean "do it alone." In all my teachings and writings, I ask my audience to ask themselves: "Who do I know to help? Where can I go to learn?" Benefit from the experience of those who have answers because they've tried it before vs. those who'd soon debate you about the road they never actually traveled.
Still, even if you do everything right (or at least everything you can think of), there are some common mistakes to avoid. I'll give you the top three; however, it is important to remember that problems are really challenges waiting for you to engage them. They are not reasons to keep you from pursuing your dream!
- Is there a fundamental flaw with your overall plan? Is your focus too narrow or too broad? Is there a market for your service large enough to sustain a viable business? Have you researched all your competitors, and do you understand how you differentiate? Have you done your homework on your market, and do you understand how to tailor your business to meet their needs? Many times, enthusiasm to get out of the gates gets in the way of hanging out in the stall until it's time to make an appearance. Entrepreneurs often overlook the important fundamentals of operations.
- Are you setting yourself up to be a vulnerable business, especially in the area of finance? When I visit Eastern Africa to work with entrepreneurs, I am awestruck at how hard the people I serve work at being entrepreneurs. I have observed that in a place where ownership eludes the masses, nothing is taken for granted. And while the entrepreneurs I work with here in the United States are equally committed (a wonderful trait shared by both worlds), I find that a major shortcoming occurs when entrepreneurs spread themselves very thin on time, resources and money. Bottom line: Take a look at your plans, and make a prediction, based on your own resources, personality and work habits. Then pour over the numbers again and again and make sure you've answered all your own questions, including when you will be paid. Once you can start to think ahead a bit into the future, you can then identify where you may be leaving yourself a bit exposed. Only then can you plug the hole before it sinks your ship.
- Have you taken shortcuts to sales, marketing and publicity? I've heard this so many times before that it's almost comical. "I've got a cousin in the ad business, a friend who can do printing and a guy who knows the sister of a lighting director for Oprah!" How come people will spend their entire life savings on starting a business and then put only a few dollars away to help promote it? I call that the "Build it and they will come syndrome." Just like in the movie Field of Dreams--only many of the stories I hear don't have a happy ending. There is absolutely nothing wrong with utilizing friends and family to help you keep your costs down in some areas, but when it comes to filling seats, filling orders and keeping your bank account in the black, this is not the place to skimp.
A huge problem I see is not spending enough on marketing. Don't take shortcuts in this area; you cannot afford to. As much as you'd like to be one of the "chosen ones" or a "winner in business," you can't do so if nobody knows about you. If you don't understand the best approach to putting the word out, then we'll go back just a bit--find a competing business that is willing to speak with you about what works.
Also, seek out a coach. There are business coaches in many industries, including the spa business, retail operations, consulting firms and professional services, to name a few. One helpful resource for you to begin your search for resources, outlets and help in this area is the Minority Professional Network Inc.
Above all else, I wish you success and hope you decide that taking the risk was far better than never taking any risk at all.
Robert L. Wallaceis the founder of EntreTeach LLC, a new Web portal designed to foster the development of minority and women entrepreneurs. He is also the founder and chairman of The BiTH Group Inc., an IT consulting firm that provides services in management consulting, telecommunications, PC support and integration, and document imaging services.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.