Why do people start a business?
Some people look for an opportunity for a challenge. Some people look for a chance to have more free time and make more money. Some people just like the glamour and status quo of saying “Oh.. I”m the CEO of X company” or “I’m starting my own business”… but what is the reality of starting a business?
The reality of starting a business is that it is a game of failure.
The odds are stacked against us.
Statistics show that 50% of businesses fail within the first 2 years
80% of busineses fail within 5 years
and get this, a whopping 96% of businesses fail within 10 years!
What that means is that if there were 100 business that started at the same time, only 4 of those businesses will succeed past 10 years.
And here’s another mind boggling statistic, 95% of those 4% of business that survive over 10 years do not make generate in excess of 2 million dollars in turnover per year!
These statistics tell us that most businesses or investments are due to fail.
Of those who survive a couple of years, often struggle.
So how do we beat the odds? How do we beat the odds of establishing a business that actually will survive over time and will become one of the 5% of business that survive over 10 years AND generates more than 2 million dollars turnover each year?
Over the next few weeks we will reveal the FIVE of the Biggest Mistakes that people make in business using teachings by the greatest investor on Earth, Warren Buffett and lead MBA teacher, Keith Cunningham.
To start off, we will reveal the first mistake that most people make in their businesses.
Mistake Number #1 – Unhealthy Attachment To Product
It sounds bizarre, but when a boss, manager, developer or entrepreneur becomes too attached and obsessed with their products – they are unable to realistically look at business and sales.
Have you ever been so consumed with a business idea or product that you’ve overlooked everything else? You’ve spent so much time working on this project, on this idea – wasted copious amounts of time, money and hope. You’re excited about your product because you love it to bits and pieces but don’t understand why other people don’t like it?
I remember in one episode of “Modern Family” (ABC US, or TEN AU), there was a story of a young entrepreneur, Guillermo, who wanted to sell his new “Doggie Training System” to Jay Pritchett, a very rich and successful businessman. The doggie training system was a dog cut in half with a tube in the middle. In the middle of this 20 cm tube was a divider to divide the “Good Doggie Treats” from the “Bad Doggie Treats”. The purpose of the”Doggie Training System” was to give bad or good treats to either reprimand BAD behaviour with bad doggie treats, or reward good behaviour with good doggie treats.
Jay Pritchett asked, “What’s the difference between the Good and Bad Doggie Treat?”, Guillermo explained that the good doggie treats are made of bacon and that the bad doggie treats are very bland.
Did he succeed in getting the financial support from Jay Pritchett?
I think most of you smart entrepreneurs would no that the product was not great at all. Guillermo spent 5 years with this product, that clearly had no market value, no logic and no audience.
Guillermo’s product might not be the greatest ever – he not only lacked in sales techniques, business skills and a great product, he failed to do what most entrepreneurs often overlook – he failed to have a critical view of his products to help him develop his product further and failed to learn how to sell.
Having a GREAT PRODUCT may not equal more money. A GREAT PRODUCT as defined by you will only have ONE buyer, yourself. A GREAT PRODUCT that is what the market wants, will have that market as your buyers!
- What that means is that you need to LOOK for the SEARING PAIN in the market and get the solution or product.
- You need to find out who the target market is and develop your product for them, SPECIFICALLY for them.
- You also need to find out who your competitors are – what are they currently doing, what is successful/unsucessful about them and what are they missing that you could potentially do?
This is a good time to re-evaluate your current product or products are really criticise them. Let go of them and let go of how awesome you think it is, because it business doesn’t look at how awesome you think your products are, it is how other people think of it.
However, this is the fun part. You should not spend too much time on your product. It will probably most likely never be 100% awesome! Having a good-enough product (one that acts as a solution for a problem in the market, good value and is simple) is only the first step…. because
“You can make and lose money in any business idea or product, but your success has less to do with what you DO but in HOW you do it!” – Keith Cunningham.
… and that will be covered in the next few weeks.