Failure happens but today we’re going to learn how entrepreneurs can avoid failure.
There are many reasons why companies and entrepreneurs fail. Let’s talk about four of the top reasons that come to mind.
In the video below, I explain in detail how entrepreneurs can avoid failure in today’s world.
#1 Have a Plan of Execution with Capital
First of all, I think a lot of companies don’t start out with a great plan of execution with the capital that they are going to need accordingly. This can result in their company becoming underfunded.
One of the key things here is that they start a business without realizing how much they need to get started —while trying to successfully execute the strategy.
Here’s the thing, I’ve been in these shoes myself and one philosophy that some entrepreneurs have is… “get it up and running, show proof of concept, and then go raise the money”.
This idea can work if you have a strong proof of concept with unique positioning —but it’s often more difficult to raise capital after you’ve gone down this sort of “rabbit hole” —because investors may think that they’ve got you “over the barrel” or that they’re going to take too much equity, etc.
All in all, it’s better to have a plan of action on the front end. So you can successfully plan for the capital, have a good business plan, raise money, get some crowdfunding, and get an investment banker.
#2 Create a Dream Team
A lot of times people don’t have either the right internal operational and management team or as I call it… a dream team.
It’s not necessary, in today’s world, to have a bunch of employees because you don’t need to deal with a lot of overhead from the beginning.
If you can’t or don’t have operational people, financial people, digital marketing people, then make sure you’ve got an exterior team of experts that you can rely on that can become part of your dream team.
For bonus, a dream team can also, help you raise capital to grow your business exponentially AND help you create an exit strategy for a successful sale of the business.
This kind of experience will give you and your dream team creditability down the road for future investments and more.
Learn more about how your business can survive during a crisis.
#3 Be Flexible to Change
As a business owner, there are many decisions that you’re going to have to make, especially the tough and unexpected ones. This is what I call the moment where you’re at a “fork in the road”, and many folks just don’t know which way to go.
Confusion and not being flexible to the changes around you can cause negativity and burnout.
It’s important to stay flexible and be ready to make the right choices when you have these kinds of groundbreaking moments in your company’s journey.
How do you survive these harder moments?
Reach out to your mentors —they’re everywhere but you have to ask for advice, help, etc.
#4 Create a Solid Marketing Strategy
I listened to many pitches on Shark Tank and this happened almost every time… they forgot to create a really strong marketing strategy. —Kevin Harrington
They didn’t know what the customer acquisition costs were going to be, or where their product was going (through which media channels), what’s the lifetime value of that customer, how it would engage the audience, etc.
Investors want to see a really solid marketing plan. This is actually one of the biggest reasons people fail… because they just open the doors and are ready to go without having a daily marketing plan in place.
For example, we spend as much as 50 to 60% of our incoming dollars on marketing to get new customers, but we had that big lifetime value with those customers.
Entrepreneurs, business owners, and startups need to watch out for these 4 ways to avoid failure. Hopefully, with a plan to raise capital, have a dream team, be flexible to change, and to execute a marketing strategy, it will be clear sailing for you as an entrepreneur. Good luck.
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