17 Reasons Why Entrepreneurs Fail In Their Business

1. NOT FOCUSING ON IPA (INCOME-PRODUCING ACTIVITIES) & MAJORING IN THE MINORS

Too many entrepreneurs are enamored with doing so many different things, more than one thing at a time, and eventually not accomplishing excellence in any.

They end up wearing too many hats and they start to forget to focus on the more important things. The reason for this is that entrepreneurs tend to have too many limited beliefs. When entrepreneurs can't let this kind of thinking go, they usually never grow and their company will own them instead.

They often major in the minors and spend more time doing non-producing activities. They try to trade a few and master some rather than focusing on areas of strength or specific areas of business that are income-producing activities. Instead of delegating them to others, they have a series of excuses to give. Their inability to focus on what's important or focusing too much on the little stuff (majoring in the minors), the financial growth of the business and what brings in the greatest return is likely to fall dramatically.

Spending time on things of minor significance will decrease the amount of time for big money-making things and increase the amount of time - not making money. Thus, you must focus on identifying the top things that you do better than anyone which produces or yields the highest income. Then consider focusing on consistently doing such things as much as you can and delegate anything outside of it to someone else.

Once you master this strategy of constantly focusing on IPA, you'll see more money flowing into your business which will give you more freedom to have people do the other stuff which will enable you to focus on the things that make you the most money. It all boils down to streamlining your business and your lifestyle.

2. HAVING A POORLY DESIGNED TEAM

Not having the right people on board will sink a business fast. They make a mistake of hiring family members or friends or individuals out of sympathy rather than hire persons who are deemed fit and qualified that will help suffice the needs of the business.

Every company should have a type of culture statement and start to hire people or bring people to their team - built or fit for that culture. Even if someone isn't at the level yet of hiring someone, they still need to master this if they intend to grow and be successful. The reason why hiring someone close to you is not always the best thing to do is that you can often be in a position that you'll be taken advantage of or you'll often end up justifying for their lack of production.

The company should not fit the culture of the individual, the individual needs to fit the culture of the company. Most people do not know how to hire effectively, but a strong indicator of getting the right person is to find people who work not just for money but because they love what they're doing. Unify the right persons and the culture will naturally develop for the good on its own. Hiring the right team is of utmost importance for a profitable business and for you to personally focus on the income-producing activities.

Entrepreneurs must not also wait till they are all stressed out before they will hire more people. Because the tendency is that they will rush to hire them and eventually execute a poor job on the interview, then find out later that they're totally unqualified. Break the cycle and find people to solidify your foundation. Thus, you need to hire slow and fire fast. Find potential team members during the interview process. Don't slap them together out of unplanned necessity. Choose them well.

3. LIMITED UNDERSTANDING ON HOW TO HANDLE FINANCES

Sometimes they start off not having enough capital for a lot of people or to support their assets and this can sadly destroy any potentially successful business.

One of the most common mistakes of people starting a business is their lack of understanding in how money actually operates and how to deal with it

When people have less understanding on finances, they tend to spend money irrationally (on unnecessary expenses or flamboyant efforts), personally work from paycheck to paycheck, and are unable to discern their personal finances from their entrepreneurial finances. There is a great chance that the business will reflect the same image of the mess. This explains why companies can make millions of dollars and still have nothing left over at the end of the day.

To help them understand their finances better is to constantly or regularly keep a pulse of their finances, to regularly meet with their accountant, and look at their numbers on a weekly basis to monitor how much money is going out and going in. For business, like any other discipline, knowledge is required in handling money - a competency needed for the business to remain functional and in worst situations, to survive. Separate your personal finances from your business. Cut yourself a check.

4. POOR PROCESSES AND SYSTEMS

If a business is a one-person operation, they definitely need systems in place to grow effectively.

The best way to describe a system is that it is a set of things or processes working together as parts of a flow or an interconnecting network. Having systems in place will allow the business to grow faster. Systems make things much more effective and productive which equates to more profitability.

Companies must have systems or processes that are easy and manageable for the employees to follow effectively and perform efficiently. If the business system is poor and the staff's having a hard time meeting the standards of the protocol, the consequence is that the business may sacrifice additional costs instead of reducing costs in their ‘inventory’.

The business system or process should be designed to be a turn key setup for each department or area so that they can continue to achieve their targets without divesting the order and the standard. You should have systems for your online marketing, sales process, hiring and even in the system of firing. It’s like making a mold of something. The first mold takes the longest and it requires attention to details, discipline, effort and lots of patience. But once it's done, rinse and repeat. You use the same mold over and over.

5. NO SOLID BUSINESS PLAN FOR GROWTH

Entrepreneurs who don't have a solid plan for growth often have a very weak business foundation built under them.

Most companies don't think big enough for their business. Many people just think too small that they tend to have no desire for massive success. These companies have no set of systems or they lack vision and success related goals and are constantly putting out fires and micromanaging, which, in turn, leaves limited time for them to foster income-producing activities.

A solid business plan means that you know, every day, what your purpose or aim is for your business. You strive to improve and move towards the next level. The strong, positive psychological effect of having a solid business plan for growth, actually creates a measuring rod of your belief in success.

Most people don't have a plan for growth because they don't believe that the future can get any bigger, better or brighter when a bad season comes their way. The rule is, no matter how bad things get, just believe! Believe in yourself and your business and bring out your passion, drive and enthusiasm.

Also, remember that having a plan with no action at all would still equate to zero. Each and every day you must know that your actions are focused toward your next move. Just like in a chess game, a good chess player plans many moves ahead.

6. INABILITY TO EXECUTE PLANS

Once a business plan or project has been committed to, most entrepreneurs do not commit to follow-through or they choose to postpone or neglect the project for the time being.

Most entrepreneurs do not execute their plans because they: 1) do not have enough budget for the implementation of the plan, 2) do not meet deadlines or do not have any deadlines at all, or 3) do not master the SOI (speed of implementation).

Companies should implement deadlines without making excuses. The faster they can implement an idea, the quicker and closer they are to achieving success. Sometimes entrepreneurs are also unable to execute their plans because of their lack of belief in themselves and their product and services or the success of the project. They fear success or they fear failure. Most tend to have a complacent approach (when they're being flat out lazy) towards their business leading to such poor systems put in place or, if any, none at all and there is a noticeable lack of organization.

If the company has a lack of execution, it would reflect that there is also lack in corporate vision for the future of the business. If the company’s leadership is not focused on deploying the resources for greater opportunities, the business will end up in trouble.

7. POOR MARKETING

A good business plan includes a solid marketing strategy whether online or offline.  The company must possess good marketing skills in providing sound opportunities for the product to be recognized to the consumers or customers. If you can't market it, you can't make it! After all, how will the attention of the products or services be known if they cannot be found in advertisements, websites, or directories. Today, advertising online or via internet is the norm, and a key component of making a presence in the business market.

One of your strong suits need to be marketing. You must get the attention of the customers and need to know your market. Test your marketing, and get educated with online marketing and social media as well. Also, keep in mind that your job isn't to focus on you, it's what you can do to solve the problem of the customer.

Marketing may involve money but will develop reputation with time. If the company lacks this aspect or has an inability in knowing how to sell their product or promote their service or how to understand what their customer really wants, the company will lose potential customers in this struggle. You must show and retain your credibility in the process because marketing skills equate to income and sales.

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