There are millions of new business ideas out there and every year millions of modern entrepreneurs set up new businesses with amazing product or service.
Even though they try all they could to strive in their business but you still wonder why modern entrepreneurs fail badly?
Well, this is simply because they are affected by unforeseen market indices and other factors which I will share with you in today's post.
For one reason or another, they are faced with slow progress or total failure and they are searching for ways to move their business from its present state.
In most cases, modern entrepreneurs are solely responsible for the stagnation of the business.
The perseverance, enthusiasm, inspiration, single-mindedness, and eagerness that bring about a meaningful result in the first place can also affect the business negatively.
It’s essential, for modern entrepreneurs to be aware of the traits within them that can hinder the growth of their business.
Why Modern Entrepreneurs Fail In Their Businesses & Possible Solutions
In this article today, I’ve identified 10 reasons why modern entrepreneurs and startups fail in their businesses and the actionable approach to each situation inclusive.
1. Inability to Adapt
If you started a business with one result oriented idea and it has been successful so far, it is possible that you don't want to make changes to the business structure/concept so as not to bring everything down.
‘If it’s not broken, don’t fix it,’ as the saying goes. I understand.
But a business strategy that is perfect for a small scale business may not work for bigger things without the introduction of new strategies.
If you think it is time to make changes is some aspect of the business, or if you’re getting the same message from your team, it’s essential to listen.
Be open-minded about great possibilities that changes to your business strategy can bring and be prepared to make changes to your initial concept. Though, It’s got you this far – but it is time to move on to the next level.
2. Shallow Research
Most businesses start up having some ideas about who their customers are and who they are competing with, but they neglect the aspect of in-depth market research.
They based their market knowledge on assumption and refuse to carry out thorough market research. When the time for growth arrives, you can’t afford to go to market without prior knowledge of the market.
You have to be focused and that includes knowing everything about your customers – even to the extent of knowing what they are discussing about on social media channels.
Similarly, the extent you can go in knowing your competitors, the more you will grow your business and make a difference. It’s this difference that will drive you to success.
Researching about competition, marketplace, trends, global politics, innovations and other important issues are the fundamental practice for a successful entrepreneur.
It is a continuous process that makes you ready for a change.
Most entrepreneurs will simply give up on an idea, just because it’s not working out as planned in the first year or two, eliminating the idea and thinking it is not worthwhile, but the real failure isn’t the idea but rather the entrepreneur who decides to give up on himself and his execution.
As entrepreneurs, we need to be flexible and constantly blend our plans of execution in such a way that lead to the desired result, no matter what it looks like presently.
We actually have the ability to move from a failed idea to a game changer within a twinkle of an eye, as long as we are consistent without losing focus and allow new ideas take their place in our business strategy, we will surely attain success.
4. Underestimating Resource Requirements
The major required resource is cash funding, but there are other resources, like access to marketing channels, vendors’ partnership and industry contacts which may be more vital for certain products, need to be well managed also.
Having too much cash, mismanaged, can be just as devastating as no cash. Don’t quit your paying day job until you start generating revenue from the business.
5. Too Many Ideas
Modern entrepreneurs want to diversify into different things, and they forget that doing one thing well and focusing your time and energy on that single thing will take the business farther than they can imagine as compare to diversifying into different things with too many ideas.
In a recent study by Bain and Company, the study concludes that diversification can have a negative effect on a business.
First of all, diversification shifts the attention of the business away from its original course.
Secondly, diversification reduces the time and resource used in the business. As an entrepreneur, you must concentrate on your core business if you want to derive benefit from the business.
6. Having No True Sense of Purpose
When setting up a business it is pertinent to have proper planning in place. Ensure that you have a clear vision and mission statement for your business.
It is difficult to see cash flowing into a business that has no clear concentration. You should spend more time in developing your product or service and identify your specific market niche.
It takes total concentration to stand out from the competition. If you cannot devise a means to make your product or service distinct, your business will not survive.
Also, manufacturing a product or providing a service that nobody finds useful will result in business failure.
7. Unrealistic Goal
Nowadays, entrepreneurs venture into business with great dreams, but they lack the dedication that it takes to make a dream a reality.
A great idea is not enough to build a successful business. It requires persistent execution of an idea to succeed in business.
Don’t sit and assume that a great idea will bring an automatic cash flow to your business. You must be ready to put in your time, energy and dedication in order for your business to succeed.
Previous studies have shown that it takes five years or more before a business can actually become profitable.
Even though some entrepreneurs start to break even around the third or fourth year of their business, it is good to understand that building a successful business requires effort, patience, and diligence.
The conservation of your business will be determined by your commitment to the business.
Entrepreneurs need to be courageous. They have to be.
It requires courage and appetite for risk to get any new business to a successful level.
But everyone has a limit they can get to and sometimes it’s the fear of sailing into shark-infested waters that hold entrepreneurs back from taking up challenges that will help the business to grow.
These can’t be done all by yourself, you need to source for help from professionals in whatever sector you venture into.
There are consultants who are more experienced in your market and have better knowledge of your chosen business, you can share their experience and get the confidence you require.
Don’t be afraid to use them.
9. No Foresight
This is another important and popular reason why most modern entrepreneurs fail in their businesses.
This implies that any entrepreneur who ventures into a business without preparing wisely for the future will definitely fail in the business.
It is a known fact that things are changing rapidly in our world, so it is crucial for entrepreneurs to prepare ahead for future trends as it affects their business.
You may not get the same result using what you used the previous year. When entrepreneurs can’t predict the future or see things from a different perspective, failure is inevitable.
Your mission and vision help you stay on the right path and focused.
10. No Business Plan
Most entrepreneurs fail to develop a solid business plan, forgetting that, a business plan is vital when starting a business.
Most of them fail to prepare even a simple business plan before the business commenced. Such business will definitely fail.
You don’t need a complicated or sophisticated business plan; all you need is a simple business plan that guides your business activities on a yearly, quarterly, monthly or weekly basis.
One amazing thing is that some entrepreneurs even fool themselves and believe they have all the business models and strategies stored in their heads.
Even though our mind can store a large amount of information at a time, but visual hard copy information of what you have planned to do can make a significant difference between success and failure.
It is true that you are the owner of your business and you intend to minimize cost and maximize profits, but that doesn’t imply that you have the ability to do everything all by yourself.
You need to outsource and delegate when necessary if you actually want to succeed in business.
No one intends to fail, but the inability to comply with some principles is what leads to failure.
As a business owner, you have to adjust in areas where you know you are not doing what is expected.
On the other hand, if you have tried your best in making your business successful, you can always get better so that you will be counted amongst successful entrepreneur of all time.
What other reasons do you think of right away aside those I have mentioned that leads to modern entrepreneurs and startups failure in businesses?
Do well to share them with us in the comment section.
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