Jun 122017
 
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How To Start A Business Destined To Fail

No one in his or her right mind sets out with the intention to start a business that is destined to fail. Still, many people unknowingly make preventable mistakes when they start a business, many of which greatly increase the probability that their businesses will fail.

Let’s jump right into five of the common mistakes I see entrepreneurs make that put their startup behind the eight ball from day one.

Start A Business Fatal Mistake #1

The easiest way to start a business that has a high probability of failure is to pay no attention to what prospects in your target market need, want, and most importantly, are willing to pay for. This is the “if I build it, they will come (and buy)” mistake that is repeated frequently by startup entrepreneurs. Many entrepreneurs build something that they would want (and maybe would even pay for), rather than building something that their target market wants and will open their wallet to pay for.

Start A Business Fatal Mistake #2

Another quick road to failure in a startup business is to base the business on a product or service that cannot be delivered profitably.

This mistake usually results from a combination of lack of necessary analysis of estimated profitability and unrealistic expectations regarding pricing the market will accept and embrace.

There is never certainty regarding pricing that will work in the near- and long-term, but that is not an excuse to not do pre-venture, direct research with prospective customers, nor is it an excuse to skip relatively simple, but informative exercises such as calculating the estimated break-even point.

Start A Business Fatal Mistake #3

Starting a business with inadequate funding is another way to create a business that is destined to fail. Although it will always be just an estimate, as unexpected costs will come up and most everything in a startup takes longer and costs more than expected, you must go through the process of estimating the capital needs of your business, at least for the first three years.

You need to understand if you have enough capital to fund the business until it reaches break-even and starts generating cash. If not, you will need to raise capital, and it will be important that you don’t wait until you need the cash badly, or worse yet, until it’s too late.

Remember, not all businesses fail because there is a lack of demand for their products; some businesses fail because they experience initial success that puts a strain on their cash flow and they cannot then raise enough money to keep the company going. Given the variety of funding sources available these days, it’s not as common as it used to be, but it does still happen. Don’t let it happen to your business because you haven’t taken the time to understand the likely funding requirements to get your business to break-even and beyond.

Start A Business Fatal Mistake #4

Running a startup that grows into a successful small business is not a battle; it is a war. It takes commitment and perseverance to provide the energy necessary to nurture your startup business from infancy to adulthood, or even just to adolescence. Typically, it is not possible to infuse such energy into your business on an ongoing business unless you are 100% committed to that business.

You must, therefore, believe in your heart of hearts, before you start the business, that growing the business is something to which you are 100% committed.

As in most endeavors, in the startup game, “dabbling is a root cause of failure”. You cannot and must not allow your attention or energy to be diluted by the many potential distractions (“shiny objects”) in today’s world, if you expect your startup to grow into a successful small business and beyond.

Start A Business Fatal Mistake #5

It typically takes time, sometimes even years, for a startup to gain critical mass and momentum in sales. As mentioned above, you need to do your best to estimate the break-even point and the expected timing of reaching that milestone. That said, you must also understand that it will likely take longer and require more investment than you expect to reach the break-even stage and move into positive cash flow.

So, the mistake you have to avoid here is pulling the plug on a potentially successful venture too early, because you don’t see immediate or very rapid success. That’s not to say it’s always the wrong move to pull the plug on a startup that is going nowhere, but before doing so, you have to make sure your expectations for speed to success are realistic. If you are gaining critical mass in your customer base, but it’s just taking a bit longer than expected, that may not be sufficient reason to abandon ship and declare the venture a failure. Do so only after careful review of the situation.

What are other fatal mistakes you’ve seen committed, or committed yourself, in starting a venture?

 

I look forward to your thoughts and questions.

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

 

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Dec 292015
 
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Ideas Without Initiative – The Entrepreneur’s Biggest Mistake

Do you have a lot of ideas “sitting on the shelf”? Big ideas. Small ideas. Million dollar ideas…

Take a moment to imagine yourself many years in the future, reflecting back on the life you’ve lived. You think about the things you’ve done, including the great moments you’ve spent with friends and family, the things you’ve tried, your great successes and your so-called failures. You also think about another category: the things you’ve never tried.  Ideas you’ve never pursued.

What do you think you’ll take the most pride and satisfaction in? What will you regret?

I’m sure the answer varies for each individual, but I also think there’s some commonality across all people. In talking with hospice nurses and in researching what people regret as they reach the end of their life, one thing always comes up: “the things I never had the courage or confidence to try”.

Think about it even at this stage of your life. What do you regret most?

For me, the answer already parallels what the hospice nurses and others have reported about people regretting toward the end of their lives: the roads not followed, the initiative not taken.

The title above is “Entrepreneur’s Biggest Mistake,” but I think this point applies to everyone, entrepreneurs and others. You do not want to look back at your life and regret the roads you did not take!

If you’re contemplating entrepreneurship and you haven’t been able to pull the trigger, stop worrying and go for it! Note, I am not saying don’t think your venture through as much as possible! I’m saying once you’ve done your research and your calculations, if all looks reasonably good, muster the confidence to take that step!

Entrepreneurship can be very rewarding. It can also be very challenging. There’s risk involved, of course, but if you’ve done your analysis, hopefully you have belief that the potential upside is commensurate with the risk.

So, what is likely to be holding you back?

I would be willing to wager that it’s not a lack of ideas. If it is, look harder – there are plenty of great ideas out there, some of which you may be able to convert into a profitable business.

If it’s not a lack of ideas and opportunities, what is it? In most cases, it comes down to the fear of failure! You’ve likely been successful in some areas of your life and you don’t want to put your self-image or the perception other people have of you at risk. You’re not willing to put it on the line or put yourself out there, as the saying goes.

Alternatively, you haven’t experienced much success to this point in your life, and you’re concerned that any new venture you undertake wouldn’t be any different. How can you change this perception and reality? Do your homework! Prepare. Don’t just wing it. Take a more diligent approach and you’ll increase your confidence and your likelihood of success.

Whatever you do though, make sure it’s not this: Nothing. Just thinking and then not following through with initiative and action will get you only one place: Nowhere.

Resolve to make this the year that you take action. Redefine “failure” as an opportunity to learn. If all doesn’t go exactly as planned, learn from your mistakes and keep moving forward! Do your homework, then take that step!

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

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Dec 152012
 
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you are not your past

You Are Not Your Past

This may be good news for some and bad news for others:  You are not your past.

If you’ve had a great past, with many successes, perhaps this is not good news.

If you’ve had a tough time in the past, with few positive experiences, this may be great news.

The reality for most people probably lies somewhere in between.

Regardless, it is important that you understand that you can start fresh today.  In fact, you can start fresh right now.  All you have to do is give yourself permission to do so!  This is the toughest part for most people.  Don’t dwell on your failures; don’t rest on your laurels.  Rather, decide that the future begins fresh right now.

This theme is front and center for me right now, as I’m involved in the very difficult process of writing my father’s eulogy.  As I’m doing so, I’m realizing that many of the constraints that he lived with during his life were self-imposed.

He was a brilliant guy, with a great education, a competitive spirit, and an exceptional ability to get along with others. Yet I think he always held back quite a bit, particularly on an emotional level, due to constraints he felt that resulted from the difficult childhood he lived as an orphan during the Great Depression.

As I’m writing and preparing to deliver his eulogy, I’m realizing how much he did in his life, but I’m doubting if anyone ever said to him, or he ever said to himself:  You are not your past.

Give yourself this simple gift.  Give yourself permission to start fresh and to overcome whatever challenges and deficiencies you may have faced in the past.  You don’t have to look far to find examples of people who have overcome massive challenges to achieve extraordinary success in their lives.  You also don’t need to look far to see people who have enjoyed success, then ended up losing it all.

Remember that you are not your past and that wherever you are today, and whatever you may have done or faced in the past, you have the option to start fresh today.

If you find it difficult to do so on your own, look to those who’ve already taken the path you’re looking to follow.  You don’t need to start from scratch.  Success leaves clues, as the saying goes.  Seek the sage counsel of those who’ve gone before you.

Remember, you are not your past, but you are your present, and you will be your future.  Give yourself the gift of putting the past behind you.  Take advantage of the present.  Every moment is a chance to start fresh and go after your goals and dreams.  Don’t waste that opportunity.  Life’s too short!

I look forward to your thoughts!  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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May 302012
 
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analysis paralysis

Avoid Analysis Paralysis – Don’t Overthink Everything

I like analysis as much as the next left-brain MBA type person, but over time, I have learned to avoid analysis paralysis.

What is analysis paralysis?  It is when you are paralyzed by your desire to keep doing analysis until you’ve analyzed every possible variation and outcome.  You end up doing nothing because you don’t want to take a risk, even a small step, without having looked at potential problems from all angles.  It is a true sickness and it runs at epidemic levels among engineers, MBAs and other analytical types.  I speak from experience, as I’m a recovering (over)analysis addict.

So how does one get over the desire to analyze everything to death, and in the process, overcome being afflicted by analysis paralysis?  I don’t think there is one, single recommended path, but here are some ideas.

1.)      Get over yourself.  Lose the idea that you always need to be right.  Perfectionism is the enemy.  Our education system and our society often make us think that we always need to be right, but maturity and experience tell us that’s not how the world really works.

2.)      Related to #1, be willing to take risks.  You may need to start slowly in the beginning, but you’ll get there.  Remember, without risk, there typically is no reward.

3.)      Realize that we live in a world where testing is quite inexpensive for most ideas and scenarios.  Learn to test, test, test, rather than trying to make sure you’re right about everything before ever taking a step.

4.)      Learn to “fail fast”.  If you can adopt and understand that fast failures usually are the quickest path to “success,” you are likely to achieve your objectives more rapidly and more consistently.

5.)      Try some creative exercises and activities.  If you’re firmly rooted on the left side of the brain, make a concerted effort to become more creative and adventurous.  It will help you overcome your tendency toward analysis paralysis.

6.)      Understand that “fail fast” doesn’t mean “fail big”.  Look for opportunities for many small failures that will provide you with the feedback and insights you need to achieve your goals.  Being willing to fail from time to time does not equate to being willing to “bet the farm” at every opportunity.

7.)      Develop support groups.  Find other entrepreneurs and achievers who, like you, are trying to make things happen and make a difference in the world.  Use each other as a sounding board and as “accountability partners”.  Push each other to take action and learn from your mistakes.  Share what you learn with the group.

8.)      Identify role models.  Find people and stories that inspire you to take action.  Read their stories and their writings often, so you stay inspired to be proactive and make things happen.  Surround yourself with others who are trying to make a difference in the world.

9.)      Seek to be a role model and inspire others.  Be a leader.  Be an inspiration to others.  Show them not just what can be conceived, but also what can be achieved.  Put your ideas into action and become a role model for those who would do the same.

10.)   Celebrate your achievements and those of others.  Take time to “smell the roses” and reward yourself for your achievements.  Also celebrate and reward the achievements of others.  Become a champion of achievement and action and you will find that analysis paralysis will soon be a thing of the past for you and those you care about.

I look forward to your thoughts!  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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Feb 082012
 
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forget the critics

Forget The Critics.  Thank Teddy Roosevelt.

I learned to forget the critics a long time ago.  It seems that no matter what you are trying to accomplish, there’s always someone, or a group of people, who wants to criticize you and your efforts.  Fortunately, early in my life, I read the (voluminous) Teddy Roosevelt biography by Edmund Morris, which led me to my favorite quote of all time:

“It is not the critic who counts, not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.”

Powerful stuff.  Obviously, this quote is from a different era, so “she” can be substituted for “he” in this wording.  This mindset applies to all people, regardless of gender, race, age, etc.

The perspective of this quote resonates with me on many levels.

First, it’s inevitable that you will stumble if you are going to try to accomplish anything meaningful.  You need to become comfortable with the stumbles, even embrace them, as they are the milestones on the path to achieving your goals.

Second, while your face may not actually be “marred by dust and sweat and blood,” you will take some hits.  Depending what your goals are, the hits may not be physical.  Rather, they may be blows to your ego and your confidence.  You cannot be deterred.  You must access your considerable will to succeed, and then press on.

Third, if what you’re trying to do is for a “worthy cause,” not necessarily non-profit, but “worthy” still, you are more likely to be able to access even more perseverance and drive.  As the saying goes, you need to have a “big enough why”.  I see people give up all the time, and usually when this happens it’s because they did not have a big enough reason to motivate them to carry on.  Don’t be a dabbler.  Engage in activities in which you are not just interested, but to which you are also committed.

Finally, and perhaps most powerfully, if you don’t let the critics get you down and even keep you from pursuing your goals and dreams, you’ll never have to count yourself among “those cold and timid souls who knew neither victory nor defeat”.  Find the courage to pursue your goals, regardless of the resistance you may receive, and you will never have to look back and say “what if”.  From my perspective, having to do so may be the biggest failure one could ever face.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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Dec 172011
 
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Stagnation is the most dangerous challenge you face

Stagnation Is The Most Dangerous Challenge You Face

I’ve worked with entrepreneurs and been an entrepreneur almost my entire career.  Although it can be a tough road at times, I would not trade it for anything.

As an entrepreneur and advisor, I am often confronted with concern about failing.  Over the years, I have learned that the only true failure is stagnation.  If you stagnate, inevitably you will get run over or passed by.  It’s an unwritten rule of the entrepreneurial ecosystem.

So if stagnation is the enemy, what can you do about it?

First, make sure you remain aware of the progress you are making, both in your business and in your personal development.  Always be learning and looking for opportunities to improve.

Second, come up with a new definition of failure.  Understand that when you are “pushing the envelope,” everything will not always go exactly as planned.  Look at every failure as an opportunity to learn, take what you can from it and move on.  Don’t dwell on it.  Most every successful entrepreneur I know will tell you that they’ve learned more from their “failures” than they have from their successes.

Third, test relentlessly.  The further you go in your entrepreneurial career, the more you realize that “business planning in a vacuum” is a bad idea.  You need to go to your target market, current customers and prospective customers included, and talk to them.  Test ideas with them.  Take some incremental risks with smaller scale releases of potential product and service offerings.  Test constantly and you will quickly realize that the data obtained from such testing is invaluable.

Fourth, if you feel you are stagnating, push yourself to be at least a bit adventurous and try a few things you thought you never would.  Moving outside your comfort zone has many tremendous collateral benefits, including giving you confidence and often causing you to realize that the world beyond your “cocoon” has a lot to offer.  This applies equally to your personal and business lives; keeping it fresh, as the saying goes, tends to benefit all aspects of your life, in ways you haven’t imagined.

Fifth and finally, realize that stagnation often brings with it a host of negative effects that can be very destructive.  Just like standing water, which any survival expert will tell you is almost never safe to drink, a stagnated mind, or business, or anything, really needs to find a way to flow again.  Without a consistent flow of ideas and fresh energy, a “system” tends to become polluted and toxic.  One metaphor I like to use for this is “don’t drink your own bath water”.  Get out there and look for fresh ideas and embrace change, rather than fearing it.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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Dec 062011
 
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Want To Improve?  Choose tougher opponents.

Want To Improve?  Choose Tougher Opponents.

Do you want to improve at some aspect of your business, in a sport you do, or in some other part of your life?  For most, if not all, of the people reading this article, the answer will be an unequivocal “YES”!  I know this because most of my readers and clients are people who are trying to grow their businesses and/or trying to improve in one or several other areas of their lives.  In short, they are go-getters.

With this “go-getter mentality,” why is it that it’s sometimes hard to get better, even when we want it so bad?  In short, in my personal experience and in my observation as a coach and advisor, the reason is that we pick the wrong “opponents”.  I put opponents in quotations because they may not literally be people standing across a tennis court from us, or sitting across the table at a chess board, or even competing with us for “share of wallet” of our customers and prospects.

Sometimes our most important opponents aren’t people at all; rather, they are the goals and challenges we set for ourselves.  Many times, those “opponents” are too weak.  We don’t challenge ourselves sufficiently.  We are not willing to put our ego on the line and take on tougher opponents, as we’re afraid of failure.  We would rather protect our self-image and the perception others have of us, than take on tough “opponents” and take the chance that we may “fail”.

Such an approach is a recipe for mediocrity, at best.  If you don’t take on tougher opponents, you will only get better by chance.  You need to be willing to lose and make mistakes, as you will learn more that way, thus increasing the chance that you will continue to improve at your chosen endeavor.  I have experienced it in my own businesses over the years and I’ve experienced it in every other competitive endeavor in which I have engaged.

When I was younger, I loved to win.  I still do, but back then, I was extreme in my love of winning.  I would choose my opponents, whenever possible, in such a way that I was almost guaranteed to win.  Winning made me feel good about myself, and it made me feel like I had an edge on the world.  As time went on and I had interaction with great coaches, and when it was outside my control, great opponents, I realized that my approach was foolish.  I could be a “big fish in a small pond,” given the way I was approaching competition, but I would never get markedly better.

I don’t remember the exact point I made the switch to valuing learning and improving over winning all the time.  If I’m being honest with myself though and I had to guess, I’d say I didn’t start really figuring it out until around nineteen or twenty years old.  It was at that time that I realized I had created my own little world of which I could be the king, at the top of the heap, but that it was the only heap I would likely ever see if I didn’t change my ways.  In great part, I had surrounded myself with mediocrity, but luckily I was able to make the mental shift.

Since that time, that epiphany, I have approached my life differently.  I make a habit of choosing the toughest “opponents” I can find.  I don’t always succeed in conquering them, but I do often surprise myself.  When I “fail,” rather than shrinking into a negative and defeatist mindset, I learn what I can and move on.  I look for another route to conquer that opponent and keep on improving.  This approach has paid big dividends on every level, with the most important benefit being that I can look in the mirror and know that I’m always willing to put it on the line to conquer the next tough “opponent”.

How do you choose your “opponents”?  Do you play it safe, or do you select the toughest ones you can find, so that you can learn and keep improving?  Take some chances.  Change your concept of failure and approach it as an opportunity to learn, not as an affront to your ego.  If you give it a try and give your newfound mindset a little time to take hold, I assure you that you will be pleased with the results, in all aspects of your life where you are willing to assume the risk of “failure”.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

Go to the right-hand navigation bar near the top of the page, enter your email and click subscribe.  We respect your privacy and will not sell your email address.  Note:  once you subscribe, if the confirmation email doesn’t arrive, check your spam filter.  It usually makes it through, but we’ve had a few get caught up in the filter..

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Oct 272011
 
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Rethinking Small Business Failure

Rethinking Small Business Failure

Over several decades working in, on, and around small business and entrepreneurship, I’ve heard a lot of small business failure statistics thrown around.  I should really put “small business failure” in quotes, because in my observation, the statistics thrown around mix apples and oranges, which only causes greater confusion.  Let me explain.

First, how is failure defined?  In most of the studies and statistics floating around, failure is defined as closure.  The study looks at a “cohort” of companies starting in, let’s say 2005, then for several years thereafter, checks to see how many are still open.  So, you hear statistics like, “80 percent of all small businesses fail within ten years,” or “50 percent of all small businesses fail within five years”.

Second, what types of small businesses are we talking about?  As I’ve discussed elsewhere, there’s a wide range of types of businesses you can start and run, from lifestyle businesses, to franchises, to venture-backed growth businesses.  This range of businesses can go from the relatively simple, one-person professional service provider, to the very complex biotech startup teaming with scientists and other advanced degree types.

Let’s tackle the issue of how failure is defined.  How do you define success or failure in your own businesses?  Is it simply based on whether you stay open a certain period of time?  I hope not!  Most entrepreneurs start their businesses with at least some idea of the financial results they’d like to see.  Even if they don’t have clear written goals, as many don’t, they don’t simply say to themselves, “I hope I can keep this thing open for five years”!

Taking it a step further, let’s look at definitions of small business failure in the context of the different types of businesses mentioned above.  Is failure (or success) in a lifestyle business the same as it is in a venture-backed business?  Of course not!  How about in a franchise?  Many franchises will tell you that your probability of “success” is much higher because they’ve worked out all the systems for you.  By mixing lifestyle businesses, with franchises, with investor-backed growth ventures, with other types of ventures, the statistics providers are mixing apples, oranges, and a bunch of other kinds of fruit.  It’s like a mixed fruit cocktail, with ingredients so varied, you don’t even know what kind of “juice” you’re drinking.

Small business failure statistics going forward must be segmented by business type, and if they are going to be calculated on the same basis as before, they should be called “closure statistics” instead.  It would also be great to see success and failure measured along other dimensions, rather than just the binary “still open” or “closed”.  Looking at a dimension such as profitability, even if it had to be averaged, for confidentiality purposes, could be quite interesting.  Magazines such as Inc. look at sales growth over a certain period of time, and while this is certainly interesting and a better metric than open/closed, it’s well known that sales growth doesn’t necessarily correlate perfectly with profitability or sustainability.

In my opinion, based on experience and observation, most of the startups and existing small businesses that fail, never should have been started in the first place.  With a minimal amount of upfront analysis, the entrepreneurs who started the businesses could have determined that their startup had a low probability of “success”.  Such basic steps as a break-even analysis can provide a reality check on what has to take place from a sales volume perspective in order for the business even to reach profitability.  These simple steps often are not taken.  I say this not to discourage entrepreneurs, as I am probably one of your biggest advocates.  Rather, I say it so that you will take the simple steps necessary to increase the odds that the business you are starting will not become a “failure” statistic, not by the open/closed failure definition, but by your own definition.  Make sure you know what that definition is, before you ever open the doors of your small business.

A few of the many questions you should ask yourself before you start your business, to make sure you don’t become another “failure” statistic:

  • What will success be for me in this business (i.e. what are my objectives)?
  • Is there truly demand for what I’m offering, or am I just selling what I understand and want to sell?
  • What is the break-even point, based on my fixed costs, variable costs and selling price?
  • What can I do from a cost perspective to improve my break-even point?
  • Will customers pay the selling price I am estimating for my products and services?
  • How long do I think it will take me to reach break-even?
  • Can I sustain myself and the business until the business starts generating, instead of consuming, cash?
  • Are my estimates of marketing and selling costs realistic in the context of the sales volume I am expecting to generate?
  • What will differentiate my company and offerings in the marketplace, so that I will not become commoditized and have to compete on price?
  • Is the potential upside of this business worth the risk I’m taking?
  • Am I passionate enough about this business to persevere through the tough times and inevitable challenges that will arise?

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

Go to the right-hand navigation bar near the top of the page, enter your email and click subscribe.  We respect your privacy and will not sell your email address.  Note:  once you subscribe, if the confirmation email doesn’t arrive, check your spam filter.  It usually makes it through, but we’ve had a few get caught up in the filter.

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Jun 232011
 
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Don’t Fear Making Mistakes

Don’t fear making mistakes; fear not making enough of them. Let’s consider two scenarios: 1.) The person who hardly ever makes mistakes; 2.) The person who makes A LOT of mistakes, but is careful to learn from them each time. Who do you think will accomplish more in their chosen endeavor (and in life in general)?

In my experience, chances are very high that the person who is willing to make mistakes, but also very careful to learn from each one, is likely to accomplish significantly more than the person who is not willing to make mistakes. Let’s look at a simple scenario to understand why this is so.

Let’s say you are an entrepreneur and you are launching a new product. As a good entrepreneur, you have developed the product because you saw an unmet need in the market and validated your perception by talking to potential buyers and even receiving substantial orders in advance of the release. In fact, the pre-launch orders were so substantial that you decide, for the time-being at least, not to seek other channels of distribution or pursue other potential customers for your new product. You feel comfortable with the $2,000,000 million in first year sales due to pre-launch orders and don’t want to risk going after other potential markets/customers that are not a “sure thing”. In other words, you’d prefer not to make a mistake and decide you are satisfied with the results of your initial foray.

Across town is another entrepreneur, a competitor of yours, in fact, who has developed a similar product. It only does about 80% of what your product does, but that competitor is confident that it is the “80% that matters” and that it will not limit the ultimate success of the product. Because the product does not have all the bells and whistles that yours does, your competitor only achieves $500,000 of pre-launch sales. Not satisfied with this, your competitor aggressively begins to explore alternative markets, uses, and distribution channels for the product. At first she finds little success, spending several months with very little to show for her incessant efforts. In the fourth month post-launch the competitor hits “pay-dirt” and strikes a relationship with a then little-known (in America, at least) Asian distributor of similar products. The relationship yields first year sales of $4.25 million, with strong profit margins, despite the distribution cost, as it turns out the Japanese demand is through the roof, permitting higher prices. The exchange rate also helps your competitor out.

So, in the end, your competitor achieves more than double your first year sales on a similar, competing product. What happened here? First, your competitor was not content with the pre-launch sales achieved, whereas you were. Second, for a wide variety of reasons, potentially including having a strong enough level of self-confidence to not be daunted by the prospect of encountering a bunch of “failure” before success, your competitor pressed on in looking for alternative markets and sales channels. Finally, your competitor viewed every “mistake” as an opportunity to learn and a step in the direction of their ultimate goal of maximizing sales and profitability of the newly launched product.

This situation repeats itself endlessly in the business world and in all other endeavors. Certain “players” become content with their achievements very quickly, long before achieving their ultimate potential. They become comfortable. They become afraid to make mistakes. Their ego is not strong enough to take any hits. They like their position as it is and they like the recognition they are receiving, so they don’t want to risk making mistakes and damaging their self-perception and the positive opinion others may have of them.

On the other hand, there are players who experiment endlessly, enjoying their successes, learning from their “failures,” but never completely content that they have achieved all that they can. They see mistakes and “failures” as opportunities to learn, not as a hit to their sense of self-worth. They learn to make as many mistakes as possible, as quickly as possible, so they can achieve their goals more rapidly and not stagnate. They understand the importance of making incremental progress and make smaller mistakes where possible — mistakes that will not “kill the company”. They’re not indiscriminate risk-takers betting the farm at every chance they get. Rather, they take a constant series of incremental risks, in order to learn, gaining whatever insights they can from each mistake, and then moving on. They do not dwell on mistakes.

Do you fear making mistakes, or do you see them as an opportunity to advance toward your ultimate objective(s)?

I look forward to your thoughts and comments.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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May 232011
 
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Punished by Praise

The Early Achievers’ Curse When Seeking Greatness and Peak Performance

Be careful when receiving praise or when heaping it on yourself (self-talk) or others. Too much of the wrong type of praise can be counter-productive and can actually undermine your efforts to become great and achieve peak performance in your chosen field or endeavor.

This sounds counter-intuitive, you may say. Doesn’t praise help to build up your self-image and make you a stronger performer with more confidence? It is indeed a double-edged sword. Praise, in and of itself, is not a bad thing. The issue is that when something comes easy to you and you hear from everyone around you things like, “Wow, you are really great at this … you’re a natural,” it tends to make you say to yourself, “You know what, they’re right; I am quite good at this”. In some cases, this leads to over-confidence and engenders a mindset that is not in touch with what it takes to become great at anything – hard work and “deliberate practice” over an extended period of time.

Based on everything I’ve seen in my own consulting, coaching and execution, there are no shortcuts to greatness, no matter the area of endeavor. You of course do have to believe that you can be successful and you have to have the willpower to make it happen, but it is very dangerous to believe that it will come too easily to you. I’ve seen it time and again, in fields as diverse as soccer, chess, mathematics, sales, entrepreneurship, art and music – the young student or adult beginner gets a lot of positive feedback early in the process of learning. They then do very well for a while and are at the “head of the class,” but then with time, they inevitably get passed by someone with less initial “talent” who wants it more and works harder and smarter to make it happen.

The other aspect of getting too much praise early is that for some, it makes them reluctant to take risks and step outside their comfort zone in the future. In order to become truly great at something, to become a true expert, you need to “take your knocks” and you need to be willing to take risks, make mistakes, learn from them, and then move on. However, if you really enjoy the early praise and recognition that you receive, it may make you less likely to take the necessary risks to achieve greatness in your chosen endeavor. The praise and recognition can actually become addictive and you don’t want to risk damaging your self-image by taking a chance of making a mistake or “failing”. Without the willingness to take risks, you can unknowingly place an artificial ceiling on your growth and your ability to become a master or an expert in your field. Such fear of failure can put an end to an otherwise promising “career” in anything.

So, what’s the answer? Well, it certainly isn’t excessive negativity. Nor is it ceasing to give or receive praise. Rather, when you give praise or receive it, you must include a counter-balancing reality check every time – a reminder that there is always more to learn – that no matter how good you are, there’s always room for growth. If the feedback, whether it be praise or criticism is not balanced this way, it can be very dangerous and can severely limit your potential to become great and achieve peak performance.

I look forward to your thoughts and comments.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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