Why Many Entrepreneurs Fail

elephant-in-the-room250

“There’s an elephant in the room… so it is hard to get around it. Yet we squeeze by with “How are you?” and “I’m fine…”   And a thousand other forms of trivial chatter.  We talk about the weather.  We talk about work.  We talk about everything else… Except the elephant in the room.  We all know it is there…”

Excerpt from the poem The Elephant in the Room by Terry Kettering

Many online entrepreneurs mistakenly leap into action and rush to build their websites – without giving it sufficient time, thought and planning – enticed by the gobs of money they’ll earn and the relatively low cost of entry.  They falsely believe that they can create a profitable business even though they lack the vital information and tools to carry them through successfully.

And although most of them are smart, passionate, hardworking and innovative people – ones who share dreams similar to your own – they nevertheless learn, and ultimately live, a hard and often unspoken truth:  the majority of online businesses fail.

So why do so many e-commerce businesses fail?

The obvious answer to the first question is that companies unexpectedly cease to exist for a multitude of reasons. However, despite common lore, businesses seldom go under due to one shattering event (even though it’s often cited as the official cause).  Rather, online businesses (and all others) go bust because many mistakes – most seemingly small – were made over an extended period of time.

While it is beyond the scope of this blog post to go in to all the key reasons businesses fail, the following was illuminated by my friend and business guru Michael Gerber, author of the E-myth and it is essential to understand.


Myth: Believing that being a good “craftsman” is all that’s needed to run a successful business

These folks erroneously believe that being an exceptional “craftsman” (e.g. financial advisor, quilt maker, therapist, coach, fund raiser, speaker, etc.) makes them qualified to operate a business that specializes in that work.

They spend most of their time performing “the work” of the business rather than leading, planning, organizing, systematizing and/or marketing their business!

Most of us know people like these … those who must be at work everyday in order to conduct business.  They do it all: pack boxes, write invoices, make sales calls, answer the phone, fix equipment, design their own web sites, write their own ad copy, troubleshoot problems, empty the trash, meet personally with every client, and so on.

They have no written procedures, documented processes or automated systems for doing anything.  Rather, their valuable knowledge, innovative ideas and sound methodologies remain only in their heads.

You also won’t find them outsourcing work, forming beneficial strategic alliances, delegating tasks to employees or seeking wise counsel from other professionals.  Why?  Because many entrepreneurs believe they already know what they need to know – AND they don’t want to know what they don’t know!

“If they don’t fail outright, most businesses fail to fully achieve their potential. That’s because the person who owns the business doesn’t truly know how to build a company that works without him or her… which is the key.”

Michael Gerber

So what happens? They try to go it alone. They get sick. They get sick and tired. They spend half a day at the Department of Motor Vehicles. They get stretched too thin. They feel rushed and overwhelmed. They worry that they can’t do it all.  They worry that others won’t do “it” right.  They know that they should let go, but can’t.  They worry about what it might cost them to let go. They fail to fix serious flaws. They ignore their customers. They have a short term, “put-out-the-latest-fire” mentality. They miss golden opportunities. They feel like they need to get away. They take a much-needed vacation. Their businesses come to a screeching halt…

And when they return they discover that the work has piled up and they’ve lost money, frustrated customers and missed golden opportunities.

What You Can Do…

  • Realize that being good at “something” does not mean you’ll succeed at running a business that does that work.
  • Objectively assess your business/marketing skills and knowledge… Begin by taking a Self Assessment.  Answer the questions honestly so you can identify your business strengths and weaknesses.
  • Play to your strengths, passions and skills. Do what you do best and let others help you. Build a team of people – employees, consultants, strategic partners, and the like – who are more skilled than you in key areas.
  • Seek, and offer, support from others outside of work… family, friends and colleagues. Take advantage of the vast resources available on the internet.
  • Automate! With all of the affordable technology available today – software, phone systems, online automation, etc. – there’s no excuse for going it alone.  It’s never been easier to communicate with prospects, troubleshoot problems, and stay in contact with customers and the like, even when you’re not there.

For more on this topic read chapter one of Mastering Online Marketing by Mitch Meyerson and Mary Eule Scarborough

 

Comments

  1. I couldn’t agree more with the first item under What You Can Do. My main client type, as a business coach (and future Guerrilla Marketing coach), is someone who started a business because they’re good at doing something and want to build a business around it only to find out that they know very little about how to successfully run a business.

    Appreciate the link to the Self Assessment, too.

  2. Hi, good day! Your work is quite impressive. I never thought that it was probable to do something like that until after I read your write-up. You certainly offered an excellent understanding on exactly how this kind of whole system operates. I will always visit for more info. Thanks!

  3. Heya i got to your site by mistake when i was searching bing for something off topic here but i do have say your site is really helpful, like the theme and the content on here…so thanks for me procrastinating from my previous task, lol

  4. Bless you! Still yet another fabulous thread, this is exactly the reason I returned for a website constantly!!

    HIEN

  5. I am impressed with all this useful information. Was WAY more than I expected. I just cannot keep up with your posts. So much information to read about.

  6. Rather superb entry, definitely useful stuff. Never ever considered I’d find the facts I need right here. I have been looking everywhere in the internet for some time now and had been starting to get discouraged. Fortunately, I happened across your blog and received precisely what I was searching for.

  7. I really enjoyed reading this blog post. I am currently involved in putting the finishing touches on my ecommerce website – AJ & Serenity Services. I know first hand how overwhelming it can be trying to do everything yourself. I’ve been learning to automate and outsource certain tasks so that I do not have to take on so much. I would definitely encourage other online entrepreneurs out there to make sure not to try to do every single thing themselves!

Speak Your Mind

*


5 × = five