Your Start-up is going to Fail: From a Management Consultant's eyes

All good things start with an idea. True.

You don't get anything or anywhere without trying. True.

Nothing beats being your own boss. True.

At least 90% of all new start-ups worldwide fail or fold in the first three years and this has been the trend for at least the last decade. True.

This is not meant or intended to scare prospective or potential entrepreneurs off from aspirations or ideas for new entrepreneurial ventures or in other words, starting new enterprises.

This not meant or intended to demoralise folks who have just started enterprises of their own, on their own, in the last couple of years.

My name is Harish Shah and I am a Management Consultant. I am writing this to tell you, if you are reading this, the common but very clear signs I see too often, which tell me that a Start-up is going to F.A.I.L, fail.

Don't know the Market, homework not done

A seasoned high-flying executive turned successful entrepreneur once told me back in my university days and I quote from vivid memory, "Everybody has ideas, but how much an idea is worth to others is the question."

I have come across creative and innovative minds who often believe they have something ground-breaking and credit to them, I have seen them come up with things that are new, different and thought of in ways perhaps others could not have thought of. However, the question of whether who or how many people will actually pay for the product they've come up with and how much they'd pay, is a question too often never asked. I like it, so I'll create it is a good thing. To build a business around it and invest precious resources into it without knowing if others will like the product enough to lead to positive ROI, is pretty reckless. Then there is also the question of, where exactly, are the people who are going to pay for your products and how you are going to reach them.

I have seen too many entrepreneurs work hard on the product, then try to figure who is going to buy that product later. The problem, is that once you have started a company, invested resources in developing a capacity and produced something, which then gets stacked up somewhere, not moving outwards, what would you do?

It is one thing to have to figure out how to sell something, it is another not to have access to people, or worse, not to have any people, or at least in sufficient numbers, to sell to, so as to recover the investment.

Then, there are the other type of entrepreneurs who come up with sure sell products, and to sell those products, they start new companies. The problem, is that too many people are selling those same products, and they are not doing anything new or different.

For example, I have seen App Developers in Singapore try to break into the market of producing custom created Mobile Apps for private companies, without doing anything new or different. Nothing wrong with that. However, in the present day and age, companies who want Mobile Apps produced for their marketing or CRM or whatever other purpose, have plenty of options. The world's second most populous country India, has more App Developers, whether working for themselves, or others, than the entire working white collar population of Singapore, that can make very good Apps, very efficiently and at rates a Singaporean App Developer would not be able to compete with, unless he does not need to eat, drink or pay for a housing mortgage. And in our global environment of tele-presence at present such services can be sought remotely and quickly, from anywhere. Unless, a Singaporean App Developer has a new technique or unique creative talent that can be marketed as a premium value-add, the chances of surviving on that trade for a living, in Singapore, would be difficult. Whether the Singaporean App Developer is looking at just the Singapore market or the global market, makes little difference. That is a market reality, that needs to be factored, before going into such a business.

Got a product people want, don't know how to sell it

Then there are people who have applied some diligence and put thought into the needs of a consumer or potential client group, come up with a solution that would solve existing problems and so well, in short, the product is great. Problem is, the entrepreneur does not know how to sell it.

How do I get clients? I have had people starting Headhunting practices ask me this question. I have had web developers starting web development companies ask me this question. I have software engineers who fired very big name banks to fend on their own, registering a business telling me they can create very useful custom tools for various organisational purposes ask me the same question. How do I get clients?

What is worse, I have had entrepreneurs selling all kinds of services approach me, invite me for meetings, then offer me commissions on selling their products for them using the following terms:

*Co-sell

*Cross-sell

*Referral

Such offers are both hilariously amusing and disturbing at the same time. A Management Consultant works on fees to advise you, produce strategies for you, guide you, furnish you with information or knowledge, help you develop frameworks or processes or change the way you do business for the better. To approach a Management Consultant, invite him or her for a meeting and then make such offers clearly indicates desperation. These entrepreneurs clearly do not know what they are doing, what they need to do, can't get help or can't afford help and eventual failure, with losses off course, is their apparent destiny.

If you do not know how to sell your business or your products, either hire someone who can or hire a Business Coach or a Consultant to guide you. A Consultant will not sell you, for you. That is not how the world functions whether anyone likes it or not. And these are options best thought of and measured before one goes into starting a business.

Unable to Focus

The trouble with being an entrepreneur, starting your own business for the first time, is that very rapidly you realise, you are not going to get a monthly salary channelled to your bank account. It is a fact.

It takes time for a business to turn a profit. That is a fact.

It is wise, prudent, to have multiple streams of income. That is a fact too.

In pursuit of multiple streams of income, to ensure some form of income however, entrepreneurs often end up incurring personal losses. This is also a very wide and real fact.

For the fear of lacking an inflow of cash, I have seen entrepreneurs virtually gamble on the stock markets, monitoring movements all day, rather than focusing on building and developing the business they have started. I have seen entrepreneurs get involved in all sorts of financial or get rich quick schemes, that are more often than not, not very wise. I have seen entrepreneurs start promising ventures with bright ideas, only to neglect them getting involved in Multi-level Marketing schemes as streams of side income that eventually end up taking 100% of their time, energy and effort. If anything, their MLM involvements ruin whatever credibility they'd have, for the genuine entrepreneurial ventures they would have set out with. I have seen too many entrepreneurs have to shut their businesses, because they were not able to work on them with focus, while having lost money on buying MLM products they could not sell on. Let's get something straight and clear, that being part of an MLM chain or scheme, whether or not you acknowledge it as MLM, is not entrepreneurship, by any reasonable or credible definition. It is a worthwhile risk perhaps for people who have salaried jobs with surplus income, who do not need an additional source of income, to engage in such activities as gambles, with possible rewards on one hand and affordable losses on the other, as long as they are not willing to devote too much time and effort in that direction, and, the bosses at their work places are fine with their "side activities".

Besides concern of cash inflow, another problem that affects one's focus in entrepreneurship, is the freedom. There is no boss. And this often leads to procrastination and indiscipline. Freedom is something we all aspire for. It is however, a beast that is difficult to control. And with the freedom of not having a boss above one's self, it is very easy to lose sight of the reality, that with your own start-up, one has to earn his or her own keep. Time is money. I have often seen new entrepreneurs get very excited with the "Entrepreneur" tag very quickly, and end up living very social and very laid back lifestyles forgetting the initial resolutions made at start-up point, of working very hard. And no start-up moves from "start-up" to "established" business, without some very dedicated hard work by it's founders.

Unable to listen

Being your own boss or being THE BOSS, is cool. Feels flattering, no doubt. However, being THE BOSS, does not mean, just dishing out instructions, orders and advice. It also means, listening to advice, of others.

"I know what I am doing." is a common line I have heard from entrepreneurs who have shut down and started sending job applications, soon after uttering it.

It is necessary to have faith in one's own ideas. It is necessary to be independent. You can't do business, or survive in business, any other way. However, nobody is perfect and nobody knows everything. Inputs from others, with different competencies, experiences or viewpoints are essential to see the bigger picture. Otherwise, one gets blind-sided, too easily, considering there would be too many blind spots, and failure is then inevitable.

"I know this". "I know this better". It is good if you do. I have seen failed entrepreneurs who have said the exact same thing.

Can't see own flaws

A common trait of successful entrepreneurs, is Self-Awareness. Why such entrepreneurs succeed, is because they do not suffer from any of the reasons of failure above. They know what they need to do and remain focused. They do their homework upfront. They mitigate their weaknesses. And they know when to listen. And if they have flaws, they are aware of them. Thus, they don't let their flaws come in the way of business success.

Those who are not self-aware, see failure in business, unless, they are able to realise this weakness, and get help with it. Few do. And few can overcome this weakness, without the right help.

Worried? All problems have a solution. Are you thinking of starting a new business? Have you started a business you think is headed to being one of the at least 90% that fail within three years? Failure can be averted. Products and strategies can be altered, while shortfalls can be made up for. Call me and we can talk about it. The number is +65 94510637.