Many times, we have seen so many entrepreneurs starting their tiny to gigantic businesses with super enthusiasm, and failing within a few months. If you ask why such failures happen, I would like to tell you the below reasons:
1. The faster you jump in, the quicker you jump out:
When you just start your business without much planning, your probability of losing is very high. If you have a great idea, don’t just jump into the business. Wait, have patience. Think about your idea like your enemy. Ask yourself a few questions –
- Do I have enough money to sustain the business for two to three years even if I don’t have any revenue?
- Do I have a business case?
- Does the market have enough customers for my business to survive?
- How long should it take to pay back my investments?
- Can anybody and everybody copy my idea and start the same business immediately?
- If I give up on the business, how much resell value would I have on my investments?
Before you just jump in, think more, and think cleverly. Don’t jump in, rather walk in. Because business is like a spring mattress. If you slowly sit there, you can sleep there, and if you jump in, it will through you out.
2. Do not sell what you want to sell, instead sell what you want to buy:
This is probably the most important thing that most of entrepreneurs fail to understand. There are uncountable things in this world that you will find to sell. Everybody wants to sell almost everything, but everybody does not want to buy everything. People choose while they buy. Even the most shopaholic girl in the world becomes choosy when she makes a purchase decision. She may buy what she does not need, but she will absolutely never buy what does not like. Therefore, a successful business only sells what its customers want to buy, not what it wants to sell. Take yourself as your first customer, would you buy that product at that cost? if not, stop there, nobody else does. Because, when you cannot convince yourself to buy your product, how could you convince others to go for the same?
3. Fill in the gap:
People all over the world are actually the same. It’s their culture and lifestyle which is different. Everybody eats, and everybody sleeps. Just try to find out the gap in the market. Study the other markets that are similar to what you are operating in. Find out the products and services that have a global demand in every society, but still is absent in your place. Gap filler businesses never fail.
4. Learn from History:
Before you look for ways to succeed, you should look for ways to fail first. If you know which actions will take you to failure, you have already saved yourself. Now you will ask me how to know the ways to fail. I would advise you to check the history. Check who failed before, why they failed, and how they failed. Here I give you some examples of big failures.
Funai, Akai, Fujifilm, Nokia, Blackberry, Altavista, Yahoo, hi5 etc. Do you remember these companies? Do you see anything common among them? Try to find out what is common within them.
Yes, right you are, they all were too busy with the present business and past success that they forgot to see the future. It was all obviously coming, and they just did not care enough. So, learning number one is, you must be able to see the future if you do not want to fail.
5. Be able to predict the future:
Technology is moving extremely fast. And it is making the business move fast as well. If you are not able to predict what it is going to bring for you tomorrow, probably you will be out of business tomorrow. Predicting the future is easy and tough at the same time. You need data and analytics to predict the future. You also need to be on top of the recent trends to be able to see what tomorrow will bring. Nokia, Motorola, and Blackberry, all failed to see the potential of Android, which eventually made them fail in the business. Your business may be a startup or a giant, but that does not spare you from the claw of time. Deploy data analytics in your business if you want success.
6. Think Upside Down:
Many people often start a business only keeping in mind what they want to sell. But, when they do that, they forget to check if people are willing to buy that product. Think about the outcome first. Try to calculate how much revenue or profit you want from this business. Once you have your estimated profit target, calculate how many units of products or services you must sell in order to achieve your profit target. Then take a real test on if it really is possible for you to reach that level of sales target. You also need to calculate your level of investment and ROI and investment payback period with your calculated targets. Now if you feel comfortable with your numbers, you may consider taking the risk of stepping into the business. If your plan does not support the numbers ditch the business, or if your numbers do not support the plans, ditch the plans.
I hope by now, you understand why and how you should think upside down. If you are still confused, or if you want to learn more, or if you want to hire me to help you out, get in touch. I will be happy to be with you in your tough times.
Cheers!