Why Start up Businesses Fail? Top 3 reasons from 3 top business mentors


I asked 3 leading start-up business mentors to tell me the top 3 reasons why they think start-up businesses fail.  I will straight away give you the reasons provided by each mentor,  as I haven’t however requested permission to identify them as the providers of this information I will simply identify them as Mentors A, B and C, note that between them, these mentors have over 40 years of mentoring experience. Fasten your seat belts.

Mentor A –

  • Lack of Planning
  • Lack of Passion and Drive
  • Lack of Experience

Mentor B-

  • Lack of planning
  • Lack of resources (not just financial)
  • Lack of persistence

Mentor C-

  • Poorly thought through decision to leave employment and get into business
  • No written business plan or financial projections
  • Unprofitable pricing structure (You need to calculate your break-even price and NEVER charge below this)

I am amazed at the common trend of ‘planning’, otherwise known as business planning or in it’s most simplistic format, a simple business plan is on thread that cuts across

I am amazed at the common trend of ‘planning’, otherwise known as business planning or in it’s most simplistic format, a simple business plan is on thread that cuts across. And I know how many aspiring business people might not generally like what they consider paperwork; but hey, that is the reason why several of the folks who have tried before us failed.

I have a documented business plan, but following this feedback, I will surely be reviewing it a lot more regularly than I do. Your business plan need not be war and peace, it could just be a 3 page document- it is quality over quantity that matters in a business plan.

Some guy named Osterwalder, created some nine building blocks of what is required for your business  or planned business to function, I have copied it down below for your attention courtesy http://www.entrepreneurmag.co.za/

Create a one page document that answers these questions in as much detail and as thoroughly thought through as you can, you will have your first business plan in place, no matter how crude. All the best!20151102_120501

9 Building Blocks of a Business Plan

  1. Customer Segments: Who are your mass and niche markets?
  2. Value Proposition: What are you offering and why are you different?
  3. Channels: Look at the phases your product goes through. This is everything from awareness and distribution to after-sales service.
  4. Customer Relationships: How are you building relationships with customers and is it working?
  5. Revenue Streams: Look at what you are charging and if you could be charging more. How are you receiving your payments and does it contribute enough to overall revenue?
  6. Key Resources: What resources do you require to function? These can include physical, human, financial and intellectual.
  7. Key Activities: Ask yourself what activities need to take place in order to deliver on your value proposition?
  8. Key Partnerships: Write down who your key suppliers and partners are and how they contribute to your overall goals.
  9. Cost Structure: Look at fixed and variable costs so that you can see what can be improved upon.

5 Reasons why you might be financially worse off than colleagues on the same pay!


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He earns the same amount as you do, why do you appear worse off?

It is simple, your expenses are more than his or his total income is more than yours.

The following issues below are, in my experience the top reasons why people with a similar income stream may appear worse off than others.

1. Paying back previous and new indebtedness– Debts could be in many forms. Not just loans and costs of overdrafts, but the costs of keeping your credit card (if you are making the minimum payment); the cost of those “buy now pay later” deals that you are enjoying. The outstanding student loans and other deferred payments to which you are committed. Some people are actually still paying for things they are no longer using simply because they bought it and were allowed to pay later, some long while ago. Stay clear of things of no life changing value that commit you to payments in the future!

2. No alternative income source– The folks who appear better off sometimes have an alternative income source that you are unaware of. Some potential source of regular or irregular additional income. A little bit from shares or rent on something or some property they own or have inherited.  Some steady cash flow from previous savings or ongoing savings and other bank instruments. They may have a small enterprise activity they are involved in; it’s not the size of the alternative income that matters; it is the fact that there is an alternative income source; that is sometimes enough to make the difference.

3. No financial cushion of last resort- Many people have a last resort option. Sometimes it’s a parent or family member or close friend whom they know that should the worst come to the worst will bail them out. If people have this they may be less careful in spending and have little or no perceived need for any kind of savings. On the other hand you might be the person who is the last resort for your family and friends in which case you need to be prepared for other people’s emergencies, plus yours. This can be a significant differentiating factor in what available finances a person has.

4. Wrong priorities; keeping up with the Jones-es- The fact that you are reading this could suggest that it has been something you have worried about, before; that you have less money than your colleagues. The good question to ask is if your financial decisions have previously been motivated by keeping in line with these folks. Getting the most up to date smartphones, the most modern TV sets or purchasing such things that drain your pocket even further before you can fully afford them. If you keep on this track, you will consistently be worse off in the pocket and rich in plastics and metals with a two year life span.

5. Those guys might be living above their means– The ultimate reason why you should not compare yourself to anyone in principle is the fact that it is one of the greatest signs of a lack of self confidence, contentment and gratitude. But has it ever crossed your mind that the people to whom are are comparing yourself could possibly be living above their means. The hard  unspoken truth is that people who live consistently above their means for whatever reason will ultimately crash at some point. You don’t want that to be you, so why should you envy someone on the path to a crash.

Now the above 5 reasons is no justification for you to the worse off person. The way out is two fold; either by reducing your expenses or by increasing your income. For practical ways of achieving these, stay tuned with me on the blog.

Have a brilliant week.

Yemi

It takes faith,…not optimism, to move forward!


ImageThe hope that SOMEHOW things will change is not faith. It is simply optimism! Faith moves, optimism waits!….and waits…even till the point of death.

The story is told of an American prisoner of war, caught along with a number of other Americans and held by the enemy, repeatedly abused and tortured for several years. Following his release and being awarded a national honour for devising a common sense method that helped his fellow POW’s (prisoners of war) survive the endless tortures by  teaching them to put a scale on the pain they felt; which helped them to mentally expect greater pain and therefore keep their strength for the worse, rather than the current pain they were feeling at any point in time.

When he was asked about the POW’s that died during the years they were incarcerated, his response “it was only the optimists that died. They always believed they would be released by Christmas, and then by Easter and then by thanksgiving and then the next Christmas again; they died of broken hopes and hearts”. Asked whether it was wrong to have faith like the folks that died he said ” I never lost faith that I will return home therefore I needed to ensure that happened”.

Faith moves, optimism waits!….and waits…even till the point of death.

I am learning not to be a mere optimist but one possessing enough faith to take what God has in store for me. Check out these four points that should move you from being a mere optimist to gaining the faith to move forward.

1. Is your belief for a change in your circumstances dependent on a person other than God and the incredible abilities he has deposited in your person? If it is, mind not who it is you depend on; your are an optimist not a moving with faith to your desired goal. On your way forward, people will always be important to your progress and some will be key to it; but keep your belief centered not on them, but God and this amazing creation he has made called you.

2. Gain knowledge of the way forward– read the word of God, get mentors, research books, speak with folks who have been where you are before, talk to the people you respect. Everyday, gain a new insight into the way forward and remember that all the sources and people here defer to the above first point. Recently I read a times article that listed the 25 best business management books of all time and because I intend to be successful in business, I have set myself a target of reading all 25. I am on the fourth….but I will get there!

3. Develop your strategy for achieving your goals– these should be built on the knowledge you have gained in No 2 above. You must have a plan; that’s what separates the optimist. If you want to live up to 100 years for example you will not neglect your health at 40- you will develop the healthy lifestyle that will sustain your body through that target age. That’s an act of faith not sheer optimism.

4. Get exceedingly busy implementing your strategy and learning more about the way forward on your plans. Don’t look back!

You will find how SURPRISING it is that it’s only the folks who are moving tirelessly in the direction of the change they desire that become  (in the sight of the optimist) “LUCKY”, “BLESSED” or have “AMAZING TESTIMONIES”.

I have chosen to be the ‘lucky’ guy, I have chosen to be the ‘blessed’ guy, I have chosen to be the one with an ‘amazing testimony’. I have a picture of the future and an unshaken faith that, rooted in God, I will not just achieve, I will surpass the dream.

God bless us, Everyone!