What You Thought Your Business Would Be
Why Businesses Fail
I am sure you have heard the statistics. About 95% of businesses fail in the first five years. What you may not have heard is the other statistic which says that about 80% of those who do stay in business, 4 out of the 5 of the 100, never achieve the kind of business success they thought they would achieve when they started the business. Which means that only 1 out of 100 business builders actually end up building the fabled business of their dreams.
What happens to the rest of the businesses that survive? They hobble along, never finding their groove, never hitting their stride and yet unable to give up as they have too much invested - emotionally and otherwise - in their businesses. By the way, these statistics are from before the great recession that started in 2008. The new statistics might be much worse.
Do you own a business? If you do, perhaps you remember the time when you started it. You may also remember that at that time, you had a vision, an image of how you wanted it to turn out. It may not have been a very vivid, detailed image, but it was there. Some expectations, some hopes, may be even a dream. Much of that vision may have come true. But some of it didn't. Perhaps your business is a little less than what you thought it would be. Perhaps it's not at all What You Thought It Would Be.
On this page, we explore why businesses fail and what a business owner like yourself can do to build a thriving, successful business she envisioned at its startup.
"Irrationally held truths may be more harmful than reasoned errors."
~ Thomas Huxley
Which Advice Do You Hear the Most - About Starting a Business?
Which advice do you hear the most about starting a business?
"Truth comes out of error more readily than confusion."
~ Francis Bacon
"Don't Do It" or "Just Do It?"
Do you remember the time before you started your business? May be there was a time you were thinking about starting your business and you asked around for some advice. There is a pretty good chance that you heard two kinds of advice.
One was some version of "Don't Do It". These words most likely came from family and friends. They obviously were not being very helpful and encouraging. In fact, after you started your business, there is a pretty good chance that these "naysayers" around you became a pretty big liability for you as you went about building your business.
But the other advice you may have heard, in my opinion, might much more damaging and, in fact, dangerous. It most likely comes from a motivational speaker type of a person. This advice is: "Just Do It."
When I started my first business, I got that advice, too. And I took it. Now I cringe every time I hear it. Why? Think of it this way. If you don't know how to box and get in the ring with Muhammad Ali, how long does it take before the knockout? About 10 seconds? If you're lucky! That's what many of us do with starting our businesses.
You see, the reason why so many of us fail at building a successful business is very simple: We Don't Know How to Play the Game - the Game of Business-Building.
Who Do You Listen To - When Building a Business?
In building a business, first and foremost, you must listen to:
A Sport, a Skill, an Art Form
Not an Intellectual, Theoretical Exercise
The school, the college, even our MBA degree didn't prepare us to be business owners. They prepared us to be employees: nurses, doctors, engineers, lawyers and even vice presidents, CFO's and CEO's. Nothing wrong with, except that if we expect traditional educational system to teach us the skill of business-building, we are very likely to be disappointed.
Here's what I mean. Learning a skill, like business-building, is a journey from the head, to heart, to gut and then to actions. You see, building a business is not really an intellectual exercise. It's also not just a physical or even an emotional exercise. It's a combination of it all. It's a skill. It's an art-form.
The reason why small businesses are failing is because most business owners who start their businesses are entering the business arena at the novice level while other businesses - their competitors - are playing the same game at the expert level. They are entering the tennis court without having ever hit a ball across the net and their competitors are tournament champions and trophy winners. They are entering the Karate competition at the white-belt level while their competitors are 4th degree black-belts. They have never been into a boxing match before and yet they enter the ring to fight with a heavy-weight champion.
Human (and business) growth and development is an intellectual process.
"We are generally the better persuaded by the reasons we discover ourselves than by those given to us by others." ~ Blaise Pascal
From Head to Heart, to Gut, to Actions
Head, Heart and Hands
Now, I am a realist. Working with business owners has taught me that most people who are about to start their businesses will still jump into it prematurely, regardless of what statistics say. Entrepreneurs are notoriously hard-headed. And to an extent, that's a positive quality. They will need that sense of supreme self-confidence to hack it in the world.
My message is really meant for those business owners who have been at the game of business-building for a while. They are the ones who really "get" what I am talking about here. They have experienced the trials and tribulations of building a business. That's why, they are more open to my message.
But they have a serious dilemma. Many, if not most business owners accept and recognize that they need to continue to develop their skills in business-building. But they don't have the luxury of taking two years off and disappearing onto a college campus. Even if they did, it would not help much because the world of academics is far removed from the real world.
They need to learn how to build their business while they are engaged in the process of building it. In other words, they need to bring their head, heart and hands together. They need the intellectual help - the best practices and principles of successful businesses. But that's only 25% of the way to mastering the sport of business building. They also need help in internalizing that knowledge by engaging with it emotionally, making it a part of their gut system and taking meaningful actions. As I like to say, they need to take the knowledge from the head to the heart, from the heart to the gut and form the gut to the actions.
"Education should no longer be mostly imparting of knowledge, but must take a new path, seeking the release of human potentialities."
~ Maria Montessori
Not Just Build, Learn How to Build
What business-builders need is a change in the mindset, a shift in thinking. If they went from merely building a business to learning how to build one, the actual building of their business will happen almost as a by-product.
A sport I love is Martial Arts or Karate. Karate has intricately woven both the Art and the Science of the sport together in a system that could be taught and learned, step-by-step, incrementally and by practicing it. In other words, Karate is more about how to fight, rather than actually fighting.
Business-builders can take their inspiration from this model. They can treat their business not just as the means to achieve their dreams - which, of course, it is - but also as a way to learn how to build a business, by building it. When they do this, they can easily detach themselves from the act of building a business and see it as a sport they enjoy, a sport they look forward to playing every Monday morning.
"Don't just do it. Know what you are doing." ~ Bhavesh Naik
Where Do You (Jump) Start...
Your Business-Building Education?
At the time of this writing (September 8, 2011), a search on "business books" on Amazon.com returns 1,998,630 results! Also, the book searches on "management," "business management" and "leadership" return 660,493, 338,287 and 69,299 results, respectively. It's safe to assume that there are tens of thousands of business theories in existence, if not hundreds of thousands. The question is which theory to pick as obviously, it's humanly impossible to be an expert in all of them. Who is right? My take on it is: they are all right but they are also all wrong. Let me explain.
Most management theories are an intellectual framework. They present an excellent theory but lack the depth and breath of total human experience. Intelligence is a part of human experience too, certainly, but only a fraction. In my work with people, I have identified seven distinct human faculties. Most management theories address only one and touch on perhaps 2 or 3 more. (Please refer to my page, Management by the Way of Awareness, for more information.) What's lacking in mainstream business development approach is an integrated human approach.
In other words, it's not that we need more advice or more information. The information is all around us. What we need is ability to bring it all together. But we do need a starting point, which I have presented below.
Do It Yourself - Business Books
I recommend three bodies of work that I wish I had digested before I had started my first business. If you could read just three books, master only three subject matters in business building, they would be these.
This is book is my top pick because most of the stuff that's covered is not taught in public schools, colleges or even in MBA schools. The central concept of this book is that a grave mistake that businesses make and continue to repeat throughout their existence is that they really have no idea what their product is all about. Instead of product development, this book addresses Marketing Concept Development and naturally leads into the areas of marketing, branding, strategy and business mission development, not to mention research and development and well product reinvention.
Most entrepreneurs start a business in their area of expertise and continue to be the resident experts in their line of business even years into their businesses. According to Mr. Gerber, it's a big mistake. I agree. A great engineer starts an engineering firm. A great chef starts a restaurant. A great home remodeler starts a home remodeling business. In the end, such business owners end up becoming the biggest bottle-necks for their businesses. This book helps a business owner transition from an employee mindset to an entrepreneurial mindset.
There are two financial statements every business owner must be able to read, interpret and track: 1) a profit and loss statement and 2) the balance sheet. Many business owners can't, relying on their accountants to interpret their numbers for them. The transition from an employee mindset to a business-owner mindset continues with this series of books.
Business Building Templates - Click the Links to View and Download
For the last 15 years, I have worked with over a hundred business owners in helping them build their businesses. I have distilled everything that I have come to know about business-building in some very simple tools. The following section gives you three extra-ordinarily simple but powerful tools to help you get started right away. If you have questions about them, please ask them in the guestbook below and I will be sure to answer them.
- Product Sheet Template
Whether you are just starting out or have been in business for years, if there was one good thing you could do for your business, it would be to complete this sheet the best you can and then keep improving it over time. Have one for each of your prod
- Business Blueprint Worksheet
If you own a business, you already know this: Most business owners don't write a business plan. If they do, they find out later that it was a complete waste of their time, unless they wrote it to raise money and were successful at it. Most written bu
- "Awayre" Business Systems
What we habitually, consistently do, perhaps even without thinking, like driving a car, defines us to a great extent. Our habits drive our successes and our failures. Our habits make us efficient or inefficient. Our habits make us healthy or unhealth
More Resources - On Marketing Message, Business Plan and Business Systems
- Small Business Plan Template: How to Write a Simple Blueprint for Your Small Business
Most business owners and executives either never write a business plan or write an intellectual, unpractical one that collects dust on their bookshelf. Discover a simple, 2-page business plan template that helps you create a Dynamic Business Bluepri
- Want to Jump Start Your Sales? STOP Marketing!
It is conventional wisdom. If we are starting out in a business, the first thing we must do is have a logo and "identity". Then we must have some flyers and brochures - some marketing materials, we say. Then all we have to do is get the word out. Pla
- A Perspective on Systems
A marketing and selling system is a set of activities and behaviors that you are committed to doing consistently over time. With such a system: - You can accurately forecast and predict your revenues, profits and cash-flow months in advance. - You h
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