5 Reasons Why Your Business Will Fail

A great idea is not the only thing needed for your business to succeed. Over the years I’ve tried several different businesses and have failed 95% of the time. For me, each failure is a valuable lesson and the things I’ve learned from my experiences are priceless. These 5 factors are the most common mistakes that business owners make and they pay a huge price afterwards. If you’re planning on starting a business like a physical store, website, blog, online store, etc, than make sure that you take into account these five very important factors.

Passion

The business you’ve started is not your true passion. Many people start a business, website or even blog thinking about making money with no other interest other than the “quick buck”. However, they’ve ventured into something where they have absolutely no passion. Before I continue, what is passion?

It’s an activity that you love so much that you’re willing to put a 100% effort into it no matter what the reward. There are many people who do things where the monetary value is very low however the excitement involved is good enough. Since success is built on effort and the only way to get 100% effort is from passion, get involved in something that your heart is completely into and that you’re doing because it’s  your hobby. Here are a few examples:

When Mark Zuckerberg launched Facebook in 2004 from his dorm room in Harvard, he had many offers from major corporations who were looking to buy out Facebook. Zuckerburg down turn every offer because he stated:

“It’s not because of the amount of money. For me and my colleagues, the most important thing is that we create an open information flow for people. Having media corporations owned by conglomerates is just not an attractive idea to me. The thing I really care about is the mission, making the world open.”

Even Google Founder Larry Page admitted that the initial attraction in starting Google was to explore the mathematical properties of the World Wide Web.  He wanted to find out if he can use the same principal to count and qualify each back link on the Web, as Page puts it:

“The Web would become a more valuable place” 

This was in 1995 and Google itself was started in 1998 when he was still attending Stanford University. What kept him pushing forward was his intrigue and passion in finding out entire how the web was loosely based on the premise of citation.

Finally, let’s take a look at Marcus Frind who founded the popular online dating site Plenty of Fish. It is reportedly making $40,000 a month in Adsense earnings. However, you’ll be surprised that the reason he had developed the site was to learn asp and asp.net. He had been jumping from job to job and at his most recent job people started getting laid off. He wanted to make sure he had enough skills to be an attractive applicant just in case he needed to look for work somewhere else. Anyway, he was surprised to see that around a month later he had about 40 people that had joined.

With passion there is no giving up because you’re not looking for a specific external reward, but just personal satisfaction. Overtime you’ll notice that other people will get involved in your website and you’ll eventually start to turn a profit. How much? Well, this will depends on the other factors listed.

Inconsistency

Imagine planting a flower and watering it for 4 days straight and then stopping because you haven’t seen it grow yet. However, you can look at it this way, if you water it for 2 weeks straight the plant will start to grow and flourish right? This applies to your business as well and many people make the mistake of putting a time line on their project. It’s even worse when the timeline is very short because your setting yourself up for failure, you just don’t know it yet.

For example, if you started a blog, setup a writing schedule that works for you and stick to it. What I normally do is not put myself in a situation where I know I will not be able to meet the demands. That’s why when I first started I promised myself to write at least one post per week. Overtime, I knew that I can handle some more so I setup another writing schedule which included two posts per week. The point is that it helped me stay consistent which is motivation too.

Are you ready for the most important lesson you learn from being consistent? You learn how to complete the task at hand and don’t jump from one task to another. This is how you fail at something when you don’t give it enough time to flourish or like the flower grow. Many of the blogging experts say that it normally takes about one year of solid work to notice a spike in traffic and interaction.

Trust and Loyalty

No matter what type of business you start if it’s a blog, service, marketing, online products, etc, it is important to gain the trust and loyalty of your customers. The success of your business depends on the continued loyalty of your customers. If your customers don’t feel safe doing business with you, than you’re in for some hard times. If they don’t feel safe, than it’s your duty to find out why. If you run an online store, make sure your deliveries are out on time. If you run your own blog, than make sure to provide up-to-date and accurate information. Finally, if you have customers that require your help, than make sure you have a customer service team ready to help them. Just imagine spending your hard earned dollars purchasing a product from a company and not have it delivered on time, than you contact customer support and no one answers. In the end of it all even if you get your purchase delivered, you’ll probably never shop with them again.

If you want your business to succeed, win the trust of your customers by providing them a sense of security and trust.

There’s a great quote that I printed and put on my wall within my office:

“If you take care of your customers, than the business will take care of itself”

A Saturated Market

When starting a business you’ll want to do some research to find out if there is a need for the product or service that you’re providing. By doing some research over the years, I believe that two types of businesses will succeed: First, targeting one very specific group or niche where there is very little competition and high demand. Secondly, very popular broad categories with high competition but you find a way to put a twist on it and do it better than your competitors. If you’re just starting out, than target one very specific group or niche because it’ll be a lot easier to build your own brand recognition.

A specific niche business is focusing on a specific product within a broad category. For example, let’s say you want to focus on “Health”. The problem with such a category is that’s its way too broad. You’re going to run into problems focusing on just “Health”. First, there’s too much competition and the websites in this category have been around for several years. Secondly, what are you going to write about? The topic is too broad so you can’t be an expert in just one thing. Third, where will you focus your marketing efforts and who particularly is your audience.

Now, if we were going to narrow down the “Health” category to something like this:

Health–>Weight Loss–>Stomach Fat–>Foods That Burn Tummy Fat–>Women–>Under 25

You can now focus your efforts on creating a blog which provides stomach weight loss tips for women under the age of 25. With this narrow niche, you can build a marketing campaign using keywords to fit this specific niche. Keywords like: women stomach fat, diet for losing tummy fat, burn stomach fat women, etc, will all be good choices. These words are just examples and it’s better to do some research when selecting the right keywords.

There are many tools available like Google Keywords Tool, where you can use to find words people are typing into Google search and how many times a month. You can also use Quantcast which is tool for used to narrow down a target audience and then building your business around that specific audience. I am not going to get into great detail about how to use these tools, but I will write a post on them later, however remember that getting into a very saturated market will restrict your growth in the beginning so try to focus on finding a marketing not too saturated and really targeting a specific audience within that market.

Marketing or Advertising

A very important process in any business development and growth. For any business to be successful you need customers and this can be accomplished through a strategic marketing plan which does not have to be expensive and cost thousands a month. With expansion of the internet, you can throw your company website on several marketing networks and drive traffic to it through PPC, banner ads, text ads, social bookmarking, article writing, etc. I’ve used marketing services, where I’ve paid $0.01-$0.03 per click and even $0.10 for 1,000 impressions. If you don’t have a method in place to generate traffic, than you will not be able to establish your initial customer base. After you have your established your brand through your initial customers, you can begin to depend more on returning visitors and word of mouth to slowly grow your potential for new customers.

Always have a marketing budget in mind which should be spread out monthly. I recommend a monthly budget because this will give you enough time to gather some sufficient data about visitor trends. Sticking to your budget is very important so you don’t over spend before you gather enough information on how you can tweak your marketing efforts. Trust me when I tell you that before you find a marketing strategy that works, you’ll be going through several different ads, formats and methods before you stick to one. When this happens, you can than adjust your budget accordingly.