In a rapidly changing world like this, nothing is more dangerous than an idea whose time have come and gone. Just look at how amazon.com has change the world of brick-and-mortar books sellers such as borders and Barnes and Noble, or how Skype is tearing down monster corporation like AT&T. Or how Napster shot out torpedo out of the music industry.
So. For this will has business owners or who someday dream of becoming one, need to be opened to trends.
This post will be talking about five relevant issues every entrepreneur must be opened to.
- Why most small business fail
- Tips to making better business decisions
- How to create a unique business that works
- Your team the main ingredient.
1. Why most small business fail:
A new small business story rarely ends happily. Over 80% of new small business fail in the first five years, 96% fail within their first 10 years -US department of commerce.
a. Fatal assumptions.
Most business fails because of fatal assumptions the owner make, they were reluctant to sit and make the necessary adjustments.
E.g just because you know how to swing a hammer, fix up a house manage a rehab, doesn’t mean you can successfully create a business remodeling and selling houses.
Just because you know how to screen a tenant applicant fill out the paperwork, take a maintenance call, doesn’t mean you can create a management business.
The technical work of a business and the business it’self are totally different. Creating and running a business is much more complex.
When this honest, hard-working, skilled person starts the business with big hopes and aspirations, but the grind, the changes, the constant demands from every direction eventually lead to several possibilities that can cost him is business. Let’s look at this example. One day a normal person (a job, a salary, expenses, a home, a family) grew sick and tired.
This person was good at what she did, she had technical skills, had experience. She knew how to do her job better than even the boss did.
But the problem with his situation was that he worked for someone else,
One day, our heroine for no obvious reason, maybe a look from the boss, a feeling of not being appreciated, or a desire for a change…….had an entrepreneur seizure.
She had enough. No more would she make money for someone else again.
She would start her own business, put all the money in her pocket,and be free of the tyranny and strangulation of a boss, of a big system, of not controlling her own destiny.
But can you tell what we happen rather. This honest, hard working, skilled person starts a business with big hopes and aspiration, but the grind, the changes, the constant demands from variety direction eventually lead to several possibilities.
- Business failure
- Burn out.
2. Self mastery
Apart from fatal assumptions, there is also an important skill you also need as an entrepreneur to succeed. Self mastery, it means the ability to control your fear, emotions, doubts,body, mind, and soul. If you can learn how to control yourself you can control your world.
- Everytime fear set in when your cash flow statement didn’t look promising you losts.
- Everytime you lost your temper with employees you lost.
- Everytime you get in the downward spiral of working in your business instead of working on it you lost.
Most entrepreneurs have certain trigger’s that causes them to literally lose it, that “it” being self control for many, it’s money. When the money runs out, the fear kicks in and the linubic part of the brain takes over. Then you do insane things. It’s no different than the cavernan running for his from the sabertooth tiger. You stop thinking and become reactionary.
3. You are not your business
” once you recognize that the purpose of your business is not to serve your business, but to serve life, you can then go to work on your business than in it. With a full understanding of why it is absolutely necessary for you to do so.
This is the distinction that so many business owners Don’t get and the results is at worst existence that sucks 100% of the business owner energy and time.
Your business is a separate entity a creation by you, and not the master of your life, because it’s separate from you it need to have it’s own identity, own rules and purposes.
So think of your business as a farm animal that you must train and break in to do it’s purpose. So you working in your business requires you to build and develop a perfect systems and processes that essentially “plow the field” of your business.
2. Tips to make better business decision
As an entrepreneur your essential “muscle” is your ability to make decisions. You either cultivate and strengthen this ability or or you let your decision muscles atrophy through procrastination indecisiveness.
Robert frost wrote, “two roads diverged in a wood, and 1-1 took the one less traveled by, and that has made all the difference.” But unfortunately not all decision is as simple as “let’s just take this path and see where it goes,” especially when you’re making a decision related to your business.
Whether you manage a small team or at the head of a large cooperation, your success and the success of your company depends on your making right decision and learning from the wrong decisions.
Cost of not deciding
Fear is really the main challenge to your ability to make better decisions. When you’re paralyzed by fear, you freeze like a deer in headlights, your instincts tell you not to move because something bad can Happened.
But in reality, inaction is usually even worse than deciding to take action, because just being alive is Risk, walking out your door, getting in a car, and driving across around town statistically put you in danger. Yet you choose to make the decision to get out of bed, get in your car, and move on with your life every single day.
And that’s exactly what this tips is design to help you practice.
1. Take right amount of time to decide what you want
Deciding what to order for lunch will not change your life, so just make the decision and Jeep the line moving!
But when it came to business and real estate investing, it has higher risk than a turkey sandwich. So it’s reasonable to allocate more time for preparation, research and deliberation.
You have to get some relevant Information to choose from. You most do some internal assessment seeing were your organization strength lies, because organization has succeeded and failed in areas related to your decision. Also seek information from external sources including studies, market research, and in some cases evaluation from paid consultant.
- Identify possible solutions to your problem, there is usually more than one option to consider when trying to meet a goal. for example, if your company is trying to gain more engagement on social media, your alternatives could include paid social advertisements a change in your social media strategy, or a combination of the two.
- Once you have identified multiple alternatives, weigh the alternatives. See what companies have done in the past to succeed in these areas, and take good hard look at your own organizations Win and losses.
- Choose among your alternatives. Here is the part of the decision-making process where you now make the decision. Hopefully, you’ve identified and clarified what decision needs to be made, gathered all relevant information and developed and considered the potential paths to take. You are perfectly prepared to choose.
2. Create deadlines
Some decisions come with built-in deadline. If you borrow money ad the load principal must be paid off in one lump sum by a certain date (i.e a balloon note), you must decided to refinance, sell, or save enough cash in order to avoid negative consequences with leaders.
But many other decisions have no real deadline, and as a result, they get delayed and delayed. In this procrastinating situations, create your own deadline
3. Ask for wise counsel
I have a rule in my business deals, never to make a large acquisition without at least letting 2-3 people I trust evaluate it with me. No matter how much I know, I AM sure to have blind spots, wise counsel from others gives me confidence and avoids large problems.
Here are some people, I seek wise counsel from in my business deals.
- My business partners
- My CPA
- My mentor
- Real estate agent
You may have different people on your list depending upon your business or situation. But the important thing is to actually have the list, and then call upon then when you’re facing an important decision.
3. How to create a unique business that works
The best business do not make their business only about the commodity they sell. A commodity is a house, a car, a meal an oil change, or a root canal, instead. The best business emphasize their business it’self as the the real product. Yes their customer end up with the commodity after the purchase, but the customers buying decisions are really about the experience of getting the commodity from this particular business.
If your business only sells commodity it’s the same as all your competitor’s, in that cases, the lowest price wins. Despite what you hear about Wal-Mart and Amazon.com winning on low price is not an easy recipe for success. If instead you sell a unique and valuable experience, you are rare. Rare commodities are valuable, and make a business very profitable and successful.
So the question is how are will to create such a business and how do we get it to work well over and over again? This question answer falls on three ground: innovation and branding.
Innovation is the heart of working on your business and not in it. “Creativity thinks up new things, innovation does new things.”
Business innovation is when an organization introduces new process, services, or product to effect positive change in their business. This can include improving existing methods or practices, or starting methods from scratch. Ultimately the goal is to reinvigorate a business, creating new value and boosting growth or productivity.
You don’t necessarily have to be a pioneering, original thinker to create an innovates business. You just need to get a very good idea. Remember, Kay kroc didn’t invent mcDonald’s, he just recognized and brought the idea and then ran with it.
Business innovation matters for one reason’ value, in order for your business to thrive, it is crucial to be continually innovating and improving, successful business innovation means finding new revenue opportunities, optimizing existing channels and ultimately generating higher profit: it should also be companies advantage over their competitor’s.
But even at that failure can’t be excluded, Thomas Edison who invented the light bulb, we’re ok with failure. Because failure is a result, failing doesn’t make you a failure not trying and quitting make you the failure.
With millions, if not billions of business trying to make a name for themselves, having a strong brand has become crucial for business to differentiate themselves from their competitor’s.
Branding, by definition, is a marketing practice in which a company creates a name, symbol or design that is easily identified as belonging to the company, this helps to identify a product and distinguish it from others products and services. Branding is important because not only is it what makes memorable impression on consumers and clients to know what to expect from your company. It is a way of distinguishing your self from your competitor’s and clarifying what it is you offer that makes you the better choice. Your brand is built to be a true representation of who you are as a business. And how you wish to be perceived.
“Jeff bezos says, “branding is what people say about you when you are not in the room”
Four importance of branding
Branding is absolutely critical to a business because of the overall inpart it makes on your company, branding can change how people perceive your brand, it can drive new business and increase brand awareness.
- Brand increase business value: branding is important when trying to generate future business and strongly established brand can increases a business value by giving the company more leverage in the industry. This makes it a more appealing investment opportunity because of it’s firmly established pace.
- Branding gets recognition: the most important reason branding is important to a business is because it is how a company gets recognition and becomes known to consumers. The logo is the most important element of branding. Especially where this factor is concerned, as it is essentially the face of the company.
- Branding generate new customers: a good brand will have no trouble drumming up referral business. Strong branding generally means there is a positive impression of the company among it’s consumers, and they are likely to do business with you because of the familiarity and assumed dependability of using a name they can trust. once a brand has been well-established, word of mouth will be the company’s best and most effective advertising technique.
- Creates trust within the market place: a professional appearance and well-strategised branding will help the company build trust with consumers, potential clients and customers. People are more likely to do business with a company that has a polished and professional portrayal. being properly branded gives the impression of being an industry expect, and makes the public feel as though they can trust your company. The product and services it offers and the ways it handled it business.
4. Your team the main ingredient:
“Talent wins games, but
teamwork and intelligence win championships.” – …
No matter what we seek to accomplish, our success or failure will depend on in part upon the team we assemble around us. In team sport’s this facts may be obvious, but it holds just as true for small entrepreneurs, leaders of non profit, or individual ventures.
A business can never get anywhere. In fact, lack of good leadership is why most businesses fail or fail to grow very big.
You don’t need to have all the answers, but you must be adapt at pulling together a management team that can come up with the answers, and motivate them to provide those answers.
Your team should also include your outside advisor’s, proper guidance from your accountants, tax advisor’s, financial advisors, and legal counsel is imperative for building a strong successful business.
Although these advisor’s can be expensive, their advice can provide you with an incredible return on your investment by helping you structure a strong business while avoiding pitfalls along the way.
As a leader, you must be extremely good at working with people being able to cooperate with as many people as possible and and helping people without crippling them are extremely important leadership skills.
Here are few principles that you can found helpful on your journey building your own team.
a. Get organized:
Even if you are at the stage where your business only exists Olin your imagination you can begins by organizing your thought and your team.
Having a real-time organizational picture allows you to visualize if there are too many or too little direct reports specific part if the organization. When you don’t have a clear line of sight or established report relationships, the ability to organize, communicates and align priorities becomes exponentially more difficult.
b. Recruit excellent team members:
Because your team is the foundation of your success, the quality if your individual team members is critical. If you have a weak link in the chain. The entire process can fail.
Choosing and recruiting the right people applies both to any potential business partner and to the members of your team and there are some criteria to consider when hiring your team.
- Attitude: mark Murphy, the author of hiring for attitude reveals in a study that tracked more than 20,000 new hires, that 46% failed, within 18 mouths. A surprising insight from the research was that 89% of the new hires failed because of additional reasons and only 11% had to quit jobs because of lack of skills. Mark father states that while technical skills can be easier to asses for employers and easier to learn for new hires. Attitude is a gray area which is hard to assess. Also, you can’t train people on attitude (at least not as efficiently as you can train them on skills). Skills are what you need to weed out the candidates pool. Attitude is what you use to select the right person from among the qualified candidates and attitudes is something that you can assess during the interview process.
- Competency: the person must be able to fulfill the needs of their specific role on the team, if their specific role on the team. E.g, the person will handle bookkeeping, they must be able to quickly learn book keeping skills. If you need someone to do leasing or custormersive, they must be a good communicator and enjoy interacting with others.
- Alignment: the goals and values of individual team members must be in alignment. If they aren’t,you will experience tension and battle’s to tug the team in different directions, this is often why good honest people still fail as a business partnership. They are trying to drive the vehicle in different directions.
3. Be a servant
You are the leader of your team, but that doesn’t mean you need. To be a ruthless dictator. The leaders I respect the most equate leading with serving.
These types of leaders are sometimes call servant leadership, they recognize that there positions doesn’t make them any better that the people they serve. They know that