Bloomberg previously released an alarming statistic regarding business failures. According to them, 8 out of 10 entrepreneurs fail in less than two years. That’s a massive 80 percent failure rate. What is happening with these upstart ventures? Does it mean entrepreneurship is an extremely risky proposition?
Everything is potentially a risk. Starting a business is risky, as firms such as UK Business Mentoring will tell you. Even the slightest misstep can cost one’s success, given the circumstances. It’s easy to see what prevents people from starting their own businesses. But fear shouldn’t govern all.
What Causes Businesses To Fail?
People are often unsure what they want to do. Having a definite reason to start a business is crucial to its success. Some may want to do so to get rich, some may think that it’ll make them spend more time with the family, or some may not like the idea of working for a boss. These reasons are good, but not good enough.
There is a good chance for success if a business is started for the right reasons. Perhaps a glaring, unresolved need in the market needs filling. Such a situation may present an opportunity to innovate. Couple that with a passion and dedication to fill said need — however cliché it might sound — and success is imminent. It’s important to keep in mind that businesses are a part of the community, and therefore should act as a genuine, human member of it. The dedication to fulfil a market need speaks bounds in this regard.
Entrepreneurs sometimes tend to conjure up an idea for a product/service, then retreat to a place where they can ‘focus’ on what they’re working on. This isn’t always the wisest move. The success of a venture relies heavily on its understanding of the customers themselves. It must be aware of their wants and needs, and thus make use of such information to deliver a solid offering.
Businesses must always foster a win-win situation with their customers. The book The Cluetrain Manifesto perfectly sums this up: markets are conversations. Businesses and customers should not cease correspondence. One must fill the needs of the other and vice versa.
The aforementioned truths must always be taken into consideration. Otherwise, it’s extremely and painfully easy to be one of the 80 percent.