Businesses fail all the time, it’s part of the risk of entrepreneurship. Nobody thinks to ask what went wrong until after the fact, and that’s the biggest problem. Before you start your business you need to anticipate your weaknesses and plan for them. Learn from other’s failures. As Warren Buffett said, “In the business world, the rearview mirror is always clearer than the windshield.”
So what’s the #1 reason businesses fail?
I’ve seen countless entrepreneurs fail because they haven’t surrounded themselves with enough experience and experts. Never think that you can do it all – it takes a team. People come in with brilliant ideas, a fantastic marketing strategy, but they’re no good at finance. Instead of building a team of people who are good at all aspects of running a business they try to take on tasks they aren’t suited for. Failures are caused by not having the right people around you that have been through the ups and downs, because it’s the downs you need to know how to handle.
You might be aware of your weaknesses, but are unsure what to look for when building a team. Sit down and take a good hard look at what you need the most help with. Be self-critical. Ask people you’ve worked with in the past what you were best at and what you lacked. Write it all down. Once you know what areas you need to personally improve, you know what kind of people you need to hire.
The second most common reason I see businesses fail is because they don’t have enough financing. It’s one of the reasons they end up on Shark Tank! All of this goes back to having the right people on your team. If you bring plenty of financial experience to the table you’ll get the money raised. Check out my post about getting your business funded for ideas on raising capital.
In the end, everyone fails at some point. Success is almost never achieved without trial and error. Don’t let failure stop you from continuing to fight for your dreams, let it make you stronger.
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