The Truth About Why Small Businesses FailSmall businesses fail for different reasons than commonly believed.
Part One of this article focused on debunking the idea that inadequate capital was a primary reason why small businesses fail. In this part we’ll look at another popular reason used to explain business failure.
Is lack of knowledge a major reason for small businesses failure?
A culprit in failure is said to be lack of industry knowledge. That’s logical and probably true in many cases. But reasonable aptitudes and a desire to learn the business aspects of a venture can overcome that negative. As an example, let’s go back to our sandwich making enthusiast from Part One.
It’s safe to assume that a person who chooses this business has enjoyed sandwich making before launching the venture. Friends and family look forward to sandwiches ranging from old standards to the new creations. In fact, testing new ideas on others is a favorite past time. It would come as no surprise that our sandwich maker purchased a food cart and plans to work local festivals. The focus of this business is sandwich making and our entrepreneur knows the subject well. But what might be missing?
Because sandwich making has gone from a hobby to a business venture, there’s now more to the process than breads and fillings. Pricing, food costs, permits, and movable storage issues will arise. But the entrepreneur will handle those concerns in stride as part of the passion and desire to do what he loves. If there was no interest in sandwiches, they’d be no drive to learn about them as a business.
All work is onerous, unless you love it
Hard work is part of any business, but it’s not considered such when one loves the venture. What’s work to others is not an effort, it’s enjoyment. It would be akin to teaching a child how to hit a baseball. The thrill of seeing the child make progress displaces the effort expended in tosses, swings and misses. Interest, love, passion or any other word describing desire is the key. The real reason why most small businesses fail is lack of interest, aptitude, love and passion. A business can be learned if there is sufficient interest. It’s that simple.
Just a word on business plans
Rarely do business plans reflect the long term reality of a venture. In fact, only the most rudimentary of planning actually plays much of a role in business success or failure. Elaborate, long range business plans have a way of evaporating when the act of ‘doing business’ takes over. In a nutshell, business plans change, a lot.
Lack of understanding one’s entrepreneurial self is the real key to why small businesses fail
Entrepreneurship is a ‘lifestyle.’ As such, to be successful, the entrepreneur must embrace their venture as a vital, interesting part of their life. To do otherwise would be a giant step toward business failure. Entrepreneurship programs, government agencies, lawyers and accountants offer advice, but none of it holds a candle to the drive and passion brought into the mix by a person committed to fulfilling a dream. The Focus Program for Emerging Entrepreneurs takes an entirely different approach to self-employment because it deals with the entrepreneur first and the business second. It is the only philosophy or way of thinking that says PERSONAL PLANNING SHOULD ALWAYS PRECEDE BUSINESS PLANNING. Old-school approaches to self-employment have been proven woefully inadequate for decades. It’s time to be truthful, face reality and see the real reason why small businesses fail.
If you’re interested in the world of self-employment, no other process or system will yield a ‘Personal Entrepreneurial Portrait℠’, a word picture of you moving into business ownership.