10 Top Reasons Why Your Business Will Fail

- So, this is such an optimistic topic isn't it? The top reasons why your business will fail, and I'm going to go through quite a few of them. But on the flip side of that, if you avoid all of these top reasons, the chances for your business to succeed are a lot higher.

So this makes this video quite an important one. Because unfortunately, statistically, most businesses do fail. So making sure that we understand what makes a business fail and what makes a business succeed is quite important.

And I'm not going to waste any more time. The reason why I'm going to be talking about this, though, is that I understand a little bit about success and quite a little bit about failure. As you probably know by now, if you haven't watched this video, and you'll understand exactly what I mean.

I'm not going to waste any more time in this video, I'm going to get straight to it, hit it. (upbeat music) So I'm going to go through these quite quickly 'cause there's quite a few on the list. Yes, that's probably why most businesses end failing unfortunately, 'cause there's quite a few on the list.

I'm going to go through the first two which are the most straightforward ones, and then get on to the more interesting ones later on. But I say that the most straightforward and simple ones and the obvious ones. But actually, they're the ones that make a lot of people stumble and are the foundational elements of how you should run a business.

So number one is, you build a product or a service, that there is no market for, and people just don't want to buy it. And time and time again, people will sit there and convince themselves that the product or service that they're building and developing and trying to sell to people, are things that people want to buy, where they haven't actually gone out and asked them and done their market research and ask the potential customers, would you buy this? Seems like an obvious thing, but a lot of people don't do that.

And they'll sit there because they think it's fantastic. They'll think that everyone else will want to buy this and it's sometimes unfortunately, not the case. Watch this video up here if you haven't done so already.

It's all about target market, segmentation and understanding how you build a business model around an avatar and a niche market and so on and so forth. So that's number one. No market for the product or service that you're selling.

Number two is not able to sell to them or the inability or the lack of knowledge or need or want or comfort or whatever word that you want to put in. People sometimes just don't feel comfortable selling or do not know how to sell their product. And, time and time again, people sit there and worry about selling and saying, ooh, I don't want to do sales.

I don't want to be salesy, it's too salesy. I don't want to come across as being salesy, where if you're in a business, you're there to sell a product or a service because if you've done your research right, and your market research, right for number one. If you've done all of that right there is a need and people want to buy.

So if people want to buy then you are doing them a service by selling it. But if people don't want to buy it, then number two doesn't apply anyway 'cause you shouldn't be in business. So let's assume that we've got number one right then number two should be that people want to buy your product or service because you are solving a pain point and a need for them.

And actually, it would be a disservice if you didn't provide the product or service that you have to them, and they actually needed it. And here's something else that we sort of think about in the wrong way and I hope next time that you come to sell and you're feeling uncomfortable selling. People actually enjoy shopping.

Think about that. People enjoy shopping, don't they? They shop for a hobby.

We as a nation and a culture and a world and a global and whatever, species. We go around shopping as a hobby, shopping is a pastime that we do. What do you want to do?

I want to go shopping. I'm going to go buying, I'm going to go start looking for stuff. We want to buy, people want to buy.

So, why are we sitting there worrying about selling when you are talking potentially to someone who's going to be super excited to buy because it's incredibly exciting for them to do that as a pastime and a hobby. So make sure that your selling experience to the buyer is exciting and a great experience. Because if you do it the right way around, they will come back time and time and time and time again.

So, number two is not being able to sell to your target client or customer. Number three is cashflow calamity. Wow, I sort of like sat down and thought about that sort of phrase all of like, two seconds.

But anyway, cashflow calamity, you run out of cash, and essentially, it means you are making less money than you are paying. And that could be for all sorts of reasons, including pricing yourself too low. If you haven't seen that video, watch this.

You need to price yourself according to the value you're offering. But also there are a myriad of reasons on why you would run out of cash and that's probably time another video. So please make sure that you like and subscribe and hit that notification bell as well, so that you can stay in touch with all of these things.

So on to number four, which I like to call the superman or superwoman complex. And, this is something that I think nearly all of us, nearly all of us, maybe not Richard Branson, but you know, the rest of us mere mortals have gone through at some point in time, or maybe even still going through. And that's when you build a business, it's your baby.

And, you know, nobody else can possibly do this better than you. So, you're going to get that cape, put it on your back and just carry the whole load, and you're going to do absolutely everything there is to do in that business. And you end up burning out, let's face it.

And we've all been there or heading there. So, don't do that, please. We're going to talk about systems and processes and how we get other people to replicate what you're doing in other ways and a little bit of tough love here.

People, once you train them in the right way, and you have the right systems, they are able to replicate what you do. Otherwise, all of these other companies wouldn't have been able to scale to the sizes that we see such as Virgin and Apple and all of the other things. Yes, your genius zone is your genius zone.

But it's your job, if you're going to run a business, to enable other people to specialise and do things that you, so that you don't have to do it. And that you have to then sit there and focus on growing the business rather than working inside it. Otherwise, you're just running a freelance contracting job and it's not a business.

So if it's a business, we're going to need to start outsourcing delegating, hiring, and we're going to have videos about this in the future. But if it's not an it's a freelance job, then that's a completely different matter and maybe not relevant to this video at all. So that was number four.

So number five is no vision and no strategy for your business. And I cannot stress how important it is to have a vision and a strategy for your business. It is really, really important.

And it surprises me and it baffles me so many times when I speak to many business owners, and they do not have a vision or strategy set for their business. So don't worry if you haven't got one set, you're not alone. But unfortunately, it might also be one of the reasons why a lot of businesses fail.

So now you know, go about setting a vision and a strategy for your business 'cause it is that important. A vision is about the destination where you're heading. You need to know where you're going.

Otherwise, how do you know you got there or how do you know how to get there. You set out, when you set out and go to any journey you pretty much have set in your head. I am going here and here and, is how I'm going to get there.

And I'm going to sort of take a car, I'm going to take a plane, or I'm going to take a bus or whatever it is. And that, or a bicycle. And I'm going to get there.

And I'm going to take this route. And here's my sat-nav, and here's my money. And here's this, and here's that.

And you set out a business plan for your route. But you don't do that for your business. We do in all other aspects of our lives, but not for our businesses.

We need to understand where we're going. And we need to understand how we're going to get there, which is where the strategy comes in. Strategy is not just about setting goals, strategy is more about understanding your destination and then mapping out a path and navigating the obstacles to get to that destination.

And it's a very fundamental difference, which makes you understand and be much more strategic. Haha, for want of a better word on how to actually run your business to get to that vision that you've set in the first place. And that's number five.

Which brings us very smoothly on to number six, which is you focus on the fun stuff and you don't focus on the stuff that you should be focusing on. (sarcastic music) And time and time again, we all do this. We sit there and we focus on stuff because it's easy for us or it's our expertise.

And it's fun, and it's exciting, and it's our passion. And we sit there hours and hours and hours and days and days and days, and we focus on it, and we work on it, and we try and perfect it, get it better and get it right. And we leave all of the rest of the other business crumble, crumble around us.

And that's not what we should be doing, as business owners and as entrepreneurs or CEOs of our business. What we should be doing is we should be looking at the strategic path that will get us to the destination that we've put as our vision. And we need to say, here's our path.

Let's get there and let's map out this route, like a sat-nav. Be the boring sat-nav, in 200 yards, turn left. In 300 yards, turn right, and follow that destination to your friend for dinner.

Instead what we do, is we sit there and we say, in 200 yards turn left. Oh, but hang on a minute. This road is so scenic, it's so beautiful.

Look at these mountains, look at the sea, look at that view, and you drive down for 200 miles. Instead where you shouldn't turn like left back 198 miles ago. And your friend is probably still waiting for dinner, which has gone cold, three hours ago.

Don't do that. You wouldn't do it to your friend. So don't do it in your business.

Number seven is that you don't have systems or processes in your business. And it is crucial, crucial, crucial, crucial. I'm going to say crucial as many times as I can in this video.

To get across that it is crucial to have systems and processes in your business. Otherwise you will not be able to stay consistent. You will not be able to measure, you will not be able to repeat things and you will not be able to get other people to do those things at the standard and the level and the repeatability that you want them to do.

And that brings us to that earlier one where we spoke about the superman and the superwoman complex. And, can you get other people to do what you want them to do at that level? Yes.

And that's why when sometimes smaller businesses hire out for the first time, and they hire teams, and they hire people, and they're amazing on paper, these people that they hire, and they bring them in, and they say, they were useless. They didn't know what I wanted them to do, and they're not doing it correctly, and they're not doing what I want. Is because you haven't told them what you want, you might have said it, but it's not the same as having it as a system and a process that they all work within.

And that's how all of these major companies like Virgin or Apple or even McDonald's, whether you like their food or not, it doesn't matter. But they build themselves around systems and processes and these franchise based companies as well. That's how they can maintain the quality.

Every single place you go, and it's exactly the same because it's repeatable. And it's not because that first person was the only person that was able to make that amazing piece of chicken flavour with its secret recipe. Everyone else can do it now.

And it's still a secret but everyone else can do it. Because of the systems and the processes in place. So number eight is, the wrong people doing the wrong things.

And sometimes unfortunately, that might include you as the business owner doing the wrong things and not letting the right people do what they need to be doing. Building teams is hugely important and it can make or break a business. And building the right team around you is going to be vital.

One of the things that a lot of people say and you've probably heard it before is, hire slow and fire fast. And this is a really, really good piece of advice. When you're building a team, make sure that you hire really slow.

Take it slow when you're trying to find the right person to do the right task and the right role and the right job because if you find the wrong person really early on, and you probably will. So don't make your first hire a really big one. Make your first hire a smaller sort of role.

So that it can be less costly. But as you scale and as you grow more, make sure that you're hiring very, very slow, very slow. But when it comes to firing, and I know that sometimes this is an uncomfortable situation to be in, you need to fire fast because having someone around that is not contributing to the business in the way that you have set for it strategically, can be quite toxic sometimes or quite damaging to your business both inside and out.

So making sure that you have the right people doing the right things and building the right team around you is crucial. So not having the right team is one of those reasons why your business could potentially fail. So number nine is the speed and rate that you are able to grow and adapt.

And this can be a double edged sword sometimes. Sometimes you can be going too fast and sometimes it can be going too slow. And sometimes you need to adapt fast for, you know, the changing environment and market like we've had in the previous sort of times.

But also, sometimes you need to sort of stay on course, and be consistent and focus on one thing. So having your finger on the pulse as the CEO of your own business. Is really, really important to be able to understand the market around you, and when to put your foot on the brakes and when to put your foot on the accelerator.

And it's one of the things that I think we potentially failed at because I think we grew and scaled too fast in the business that I talked about here where, which failed. I think we scaled too fast. Yes, we weren't paid for our eight figure project.

But I think we had the wrong people at the wrong, with the wrong training, working at a company that was valued at much, much higher than the training that they had received in. And we were working on projects, which were way too high, and we could have probably had the right safety nets in place, which we didn't. So, having the ability to understand that capacity to change speed is really, really important.

So number 10 is the wrong type of passion. What do I mean by that? A lot of times I hear people saying, build a business around your passion.

And that's the wrong way around things. You should not be building a business around your passion, build a business around a market need, build a business around something that makes business sense, that is going to make money and there is a need and there is a demand and there is a good market size. So on and so forth.

And marry that with your passion, then you've got something that isn't going to be potentially a good thing. Because yes, you don't also want to be doing something that you're not passionate about. If you're going to be running it on a day to day basis.

If you're going to be finding a market need and saying I'm going to build a business that I'm going to hire out an entire staff of people to do and I'm going to have nothing to do with it and I'm going to go away and do something else, then you don't even need to be passionate about it. But if you're going to work on it on a day to day basis, yes, you should be passionate about it. But it shouldn't come from just your passion.

Because unfortunately, if you sit there, and it's just something that's passionate, and there's no need for it. It will turn into the bane of your life. And you will hate it, and you will detest it.

Because you will struggle and suffer to convince people to buy your product or service that you're incredibly passionate about, nobody will want to buy it, and you will sit there and you will hate it. And you will never want to see the sight of it again. So don't do that.

Do it the other way around, but still find the right type of passion, not the wrong type of passion. And that trips up a lot of people when they find the wrong type of passion. They either find something that they're passionate about that has no market.

Or the other way around, and it just doesn't work one way or the other, if you're going to be working inside the business. So why they just 10 reasons? The answer is yes and no, there is one more reason, there is like a little bonus one that's outside this sort of the top reasons why your business will fail.

And this one, is actually no, or rather the inability to say no. I left it out of the sort of the top 10, if you will, because it's not so crucial. But it's still very much worth mentioning.

Because it trips a lot of people up. Because people, including myself, a lot of times will sit there and try and please everyone, including clients. Saying yes to them, trying to make them happy.

Yes, and yes, and yes, until we drown in all of the yeses that we have. And we can no longer cope because we've taken on too much. Or we burn out in the process.

And what we don't realise is, every time we're saying yes to one person, we're using up resources, we're using up our time, we're using up all of these things. And in return, we're saying no to a whole bunch of other people. So if you don't want to say no.

Make sure that when you're saying yes to that person, you've got all of these noes in the back of your mind. And say, am I going to really say no to that one and that person and that person and that person and that person. Just don't do that because it really trips us up and we sit there and we drown, we drown, and I've been there and it's not pleasant.

So I put it in there because I think it's really important and it's something that trips us up a lot. I'll see you next time. (beep) Okay, so when do I get to say the bit, you know, like all the other videos out there on YouTube where they say if you don't want to fail, you need coaching and mentorship and advice and you just need to pay me money.

Well, which part? When do I get to say that?