There are a number of entrepreneurs that start business on daily basis but at the same time there also many businesses that fail on daily basis. One would say that is okay as failure is part of life. Failure in life is a red flag that informs one of the ways that do not work. The business failure rate is however over 80% of the new business start ups. This means a good number of new businesses don’t reach their first year anniversary. For sure the failure rate over 80% is too high and costly in terms of time and resources. The high failure rate is so because of the following issues that can be addressed:
Lack of positive attitude towards business
Many people have negative attitude towards business. Many think that business is hiding place for those who failed to succeed in their education career. Therefore there some people who end up in business because they lack something better to do with their life. They are in business with all their frustrations resulting from their failure to secure good employment. For sure there is no way one would succeed in business if he or she has negative attitude about it. One has to be in business by choice and should have a positive attitude towards it.
Lack of blessing in business
Blessing in business plays a key role in the success game. You cannot force yourself to achieve sustainable success in areas where you are not gifted by nature. For example you cannot succeed in business if you generally do not like building relationships with people of different backgrounds. You may be blessed in terms of capital and other resources because of your background. Your family members may support you because they are gifted in business.
Commitment of the sponsor
The sponsor must have a purpose for being in business and should be committed to the purpose. The sponsor must have the time to spend on the business and cannot depend on other people to implement his or her mission. Other people can only help a sponsor but cannot take over his or role of directing the business towards desired state.
Lack of planning
Some entrepreneurs venture into business without engaging in any planning. They just invest in any idea that comes to their mind without caring whether it is viable or not. They cannot succeed in business if they do not take time to analyse their current state, to determine where they want to go and to decide how to move from their current state to where they want to go. Through planning new entrepreneurs come up with a roadmap to guide them in the implementation of their mission.
Many new entrepreneurs venture into business when they are only sure of the products and services they plan to produce without little knowledge if any about a target market they plan to serve. There is a tendency of new entrepreneurs venturing into various sectors of the economy because other entrepreneurs are in the same sector. The competition is often stiff in a market where there are many operators. One should therefore select a niche market capable of providing effective demand for the intended product and services.
Selection of winning team
Many new entrepreneurs lack expertise in key areas of business including finance, strategy, procurement, employment, production, and risk management among others.
They cannot succeed in business unless they get experienced staff to help them is areas they lack expertise. Therefore a new entrepreneur has to select people with expertise in selected areas and develop them into an effective and winning team. An entrepreneur can only succeed if he or she supported by an effective and winning team. The team will support and guide the new entrepreneur as he or she walks from current state to the future desired state. Many new entrepreneurs fail because of lack of an effective supporting team.
Author: John Muhaise Bikalemesa
Director: Big Drum Advisory Services Limited