I have seen countless authors cite statistics that say 80 to 90 percent of startups fail within the first 18 months. Many of those citations are out of date or just apocryphal. What is true is that failure has become a badge of honor and failure postmortems so vogue in places like Silicon Valley, you would think some people wanted to fail. I never do, and neither do most people. In fact, the numbers are not quite as dire in a 2016 article cited research by the Statistic Brain Research Institute, which broke down startup failure rates by industry after four years. But the reality is still more than half of all startups failed in that time – and not because of fraud or any criminal acts.
The number one reason? Incompetence.
Having been a corporate officer and a successful entrepreneur, I’ve learned that many of the principles to create a successful business are the same – whether you are a leader in a Fortune 1000 company or an entrepreneur in your own venture. The only real differences are the magnitude of resources, qualification of talent, size of budgets, the politics you deal with and the performance metrics – and your competency in dealing with all of them. The rest is just a different kind of competence – common sense – and without it, most people will complicate things, rather than staying the course during times of uncertainty and change.
Leading and/or running a business is all about the details. Whether it’s a sales issue, quality control, client relations or a marketing strategy, the difference between being good and being great is the attention to detail you apply to make sure momentum is not lost after the first year or two and get into a rut. And whether it is marketplace demands, knowing exactly what your clients expect or how to improve your product/service offerings or sales approach, you can avoid that rut and keep your growth momentum by getting close to the details and doing the following things.
1. Critically Evaluate Existing Products and Services
As an entrepreneur, you must continuously filter your products and services through your own “innovation lab” so that you are always challenging the business to improve well before the marketplace demands it.
But because many entrepreneurs focus on selling, they don’t spend enough time evaluating the features/benefits of their existing products and services. Because the marketplace is so competitive and the speed at which client demands change, entrepreneurs that don’t spend enough time thinking about why their clients should continue to buy and why new clients should consider buying will quickly lose market share.
For example, I sit on the board of a non-profit organization that had trouble expanding into new markets. By critically evaluating the features/benefits of its services, it was determined that demand was limited to a more affluent audience – thus limiting growth. After much introspection, the organization decided that its future depended on modifying its offerings, repositioning its brand and broadening its appeal to a larger audience.
2. Improve Sales Techniques
I discussed this topic with entrepreneur and sales expert Brad Lea. He shared this advice from his own experience: “Selling is about asking the right questions and listening intently to the answers. Only the customer can tell you exactly how to sell them your product. Most salespeople do not ask the right questions, never mind listen to the answers. Remember, whether you’re in a b-to-b or b-to-c business, people don’t buy products; they buy solutions. They buy results. People don’t want the drill bit – they want the hole. They don’t buy cars; they buy a way to get to work or enhance their image.”
To avoid these traps, buckle down and take a fresh look at your sales techniques – and get all your team involved. There are different ways to sell and different messages for every audience these days. It takes a team effort with different perspectives to ensure you are using all the possible sales approaches and techniques. That’s how we transition together from being informal to formal entrepreneurs in the workplace.
3. Be a Better Businessperson
Yes, being a successful entrepreneur requires you to have strong business acumen, but just because you can sell or market something doesn’t necessarily mean that you are a good businessperson. Perhaps your business is in a rut because you are not hiring the right people, motivating your teams rightly, managing budgets correctly, making wise decisions or surrounding yourself with the right business advisors.
An effective businessperson understands the variables that drive costs and increase profits; they know how to create a strong company culture and build employee morale, how to service and listen to client needs and how to read the probability patterns of the marketplace – just to name a few of their abilities. Sure you can hire people to do these things for you. But if you don’t understand the foundational principals yourself, you will never be able to anticipate the unexpected and soon find yourself repeating the same mistakes over and over again.
This is when the business begins to manage you the entrepreneur rather than you managing the business – getting you and your business in a rut that is difficult to get out of.