A lot of people want to give entrepreneurship a try, but sadly most of them do not even get a chance to take off. Many commit the same entrepreneurship mistakes repeatedly, blocking their path towards success. Victoria Wieck delves into the top five reasons why startup businesses fail, which she personally experienced and overcame. Knowing how to properly navigate the market, you can finally get out of the 90% failure rate and rise to the 10% of business-savvy entrepreneurs.
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Top Entrepreneurship Mistakes You Should Avoid
I want to talk about the top five reasons why entrepreneurs fail or the top five reasons why startups fail, specifically. Startups fail at an alarming rate of 90%. To me, there is no good reason why 90% of startups fail so I decided to look into why they failed. There are a myriad of reasons but I’m going to focus on the big five reasons why they fail. I’m going to quickly go over them and then I will do a deep dive on each of the five.
The first one is unrealistic expectations. The second is failing to make a connection with their target audience. The third is trying to do too much. We all know what that feels like. The fourth is sacrificing quality for quantity. Lastly, the self-doubt that seeps into all of our lives, not just our business lives. Let’s get back to these five and I did a poll of a lot of the small businesses that are no longer with us. I’ve also done an analysis of published reports about small businesses that failed. I can relate to all five myself because I’ve been through all of that. I’m very blessed that I have survived these five things in the very beginning stages of my journey as an entrepreneur and as a businesswoman. Let’s go into this.
First of all, the unrealistic expectations. This is very easy to do because if you are an entrepreneur and you’re so excited about something you’ve come up with. How many times have we heard people say something like, “There’s nothing else like it out there? Just wait until I opened my business or I get my patent. It’s going to sell by itself,” and all that. Those are unrealistic expectations because I have seen that in my 24-year career on TV as well. Ninety-nine pecent of the products that go on TV actually fail. The failure rate on TV is 99%.
A lot of them have great products, things that solve our problems, but they didn’t do a great job of marketing themselves. If something is revolutionary, you have to educate people that it does all the things that it does. Unrealistic expectations where you think that all you have to do is get enough money together, and you’re going to have to get your patent, and all that stuff. Once you open your business, everything is going to be smooth sailing. It’s one of the main reasons why a lot of businesses fail.
They haven’t worked out all the other aspects of educating your customer, how to find your customer, how to find the right price point, how to deliver that customer expectations and experience and continue to follow up. You’re going to need more than your family, friends, classmates or girlfriends at your country club to buy your things. You’re going to need hundreds, thousands or maybe millions of people buying your products if you’re going to be successful. Make sure that your expectations are measured with the market reality.
Failing To Make Audience Connection
The second reason is failing to make a connection with their target audience. This is a big one because the biggest problem is that a lot of small businesses identify their target market as much bigger than what they are. I suffered from this very thing in that when I first started my business, I thought my target market was all women because I designed beautiful jewelry. I thought I was a pretty talented designer. I knew that most women like jewelry. In fact, most men buy jewelry of some kind for their significant other, their mothers, sisters or the people who work for them.
Startups fail at an alarming rate of 90%.
I thought the market was everybody and that’s a huge mistake. I would say find your target market. In my case, I ended up designing a jewelry line specifically for professional women, to wear my jewelry as an expression of who they are, a little bit of their personality, but for the workplace during the day. It’s a little bit more casual. They’re a bit more professional and a little bit more toned-down version of the nighttime fancy jewelry.
Make a connection with your target audience. You’re going to need hundreds of thousands of people that are going to fall in love with you, your company, your team, your product and the customer experience that you deliver. Make sure that you understand us. It’s not like, “I love my products. Products that sell themselves and solve everybody’s problems. I’m going to put it out there and customers are going to flock to them.” That’s not true. You have to go out and get your customers.
You might not realize this but for example, jewelry. When I’m selling jewelry, you might think that I’m competing with a lot of other jewelers. I am but I’m also competing with a lot of other luxury goods. For example, you wanted to get a Mother’s Day present. You want to get your mother a heart diamond or something. The consumer has a choice of buying that or buying your mother a vacation or buying her a nice practical handbag. There are all these other things that are not even in your category that’s fighting for the same dollars.
Make sure that you make that incredible connection with your target audience because you want these people to love you so much. You want these people to be borderline fanatic about you so that they love the product. They tell about your product and about you to everybody else that they know, and that’s how you’re going to grow your business. That second one is a big one.
Trying To Do Too Much
The third one is trying to do too much. What does that mean? All small business owners go through this at one point or another. You’re already doing too much on the backend. On your side of the business, you’re the CEO of your company, but you’re also the Chief Lawyer, Chief Finance Officer, Chief Customer Service Person, Chief Shipping Person. You’re in charge of all of that. Don’t try to do all of those things and lose sight of the fact that you need a great product line. You need to figure out how to get millions of people to fall in love with you.
On the customer side, you may want to please your customer so much that you are going to end up doing too much for her. For example, if you are a coach that teaches other coaches how to get and convert those leads, focus on that. Focus on generating leads, converting those leads, and that’s enough. If you start to say, “I do Facebook ads. I’m a marketing agency. I’ll teach you how to get leads, convert, close, do your products and do your marketing,” you are now getting into eighteen different areas of specialties that other people could do more.
99% of the businesses that go on TV actually fail.
If all you do is help people to generate leads and you have that emotional connection and understanding how to get those leads, then focus on that. If you are a hairdresser and you have a salon, you are specializing in hair care hair salon. You’re doing colors, cuts, blow-dry. Don’t go and sell like, “Our customers are this or that, so I’ve got a whole line of yoga clothes,” because that’s a whole different category of a service. Not all yoga people would go to a hair salon to buy stuff. It’s not their core thing.
Someone asked me what I thought. This is a young kid and he loves quirky books that the big bookstores like Barnes & Noble don’t carry. He also liked the idea of offering people a real book cover or something that they can hand. It was always going to be a small market anyway but he thought, “I want to offer people coffee when they’re shopping. A lot of the Barnes & Nobles have a Starbucks inside. While they’re there, if I offer them little mini finger sandwiches, yogurt or something like that, they might stay longer and buy more things.” You’re trying to do too much. Focus on what you do well and make sure that you do that better than anybody else. Trying to do too much and offering too many services that you are not an expert in is a quick path to destruction.
Sacrificing Quality For Quantity
The fourth one is a big one too. That one is sacrificing quality for quantity. A lot of us do this. We go and buy things on sale. If you go to Victoria’s Secret, they’ll have five panties for a price of $25. Most of us will pick three and you’re like, “It’s cheaper to do the two other ones.” Even though you didn’t love the other two, you buy them. Would you be better off buying 1 or 2 that you love for $7 or $10 apiece? I don’t know, you’d be the judge of that. A lot of times, as business owners, we want to save money. We want to save our customers money.
Are they going to pay for a premium quality soap for $20? We don’t know. You don’t want to downgrade just for the price point. A lot of times, people can buy a Pril soap or a Dial soap for $2. If I have organic soaps that have no wax, no glycerin, no this or none of that, it’s all pure soap that’s going to last you a year, I’m just making this out off the top of my head, would they pay more? Would they pay $8? Would they pay $10? Probably.
Think about quality versus quantity. This also goes with everything like social media. People are buying bots so that they could have supposedly 5,000 followers when they only have 500. Having bots to make you look like you have more social media following doesn’t generate sales, none whatsoever. You’re better off having only 1,000 people who love things that are organic and earthy. You want to have a hardcore following of people that matter to you, your business, your main philosophy and your mission.
Make sure your expectations are measured with the market reality.
Whether that’s social media, prices, actual product, or even the quality of your customers. If you offer a 50% off coupon and you’re looking at these people who do nothing but coupon shopping from place to place, they come to your store because of a coupon and they will leave your store because of somebody else’s coupon. Make sure that you understand that quality always triumphs over quantity. In the long run, that’s the only thing that matters.
We come to the last point, which is self-doubt. A lot of times, as entrepreneurs, you have to go out and create wealth and paycheck for yourself, your employees, your vendors, and it’s scary. You’ve got to do that every single day. Many entrepreneurs put pretty much their heart and soul and everything on the line every day. It is a very scary thing and self-doubt can seep in at any point. Even when you’re at the high. You’re like, “How do I protect this success that I just have?” Sometimes when things are taking longer, you might go, “I wonder if this is the beginning of the end.”
I understand how that feels because I’ve been at both ends of the spectrum. That’s normal and it’s natural. Sometimes it’s healthy for you because it makes you think about things. It makes you go through it one more time but understand this. If you’re reading this right now and you already have a business, and any part of this has resonated with you, the top 1, 2, 3, 4, I want to say that you are more than enough. You have everything you need to succeed. Just make sure that you’re not going to ever get rid of self-doubt because it is natural and it’s healthy. Understand that without making decisions that you can be confident about, you’re never going to have a great business.
How do you then get the confidence? If you thought, “All I have to do is get a patent and put it out there, people are going to just flock to my thing.” People aren’t flocking because people aren’t supposed to flock to you just because you have a patent on you opened your store. Those types of things, when you have your expectation checked, for example, “No matter what I do, I’m going to have to build my following. I’m going to have to build my business. I’m going to have to build that trust. I’m going to have to build that respect. I’m willing to do so many hours a day to get that, to build respect, build a trust level with my customers. I’m willing to do these six things,” when those things trickle in, you’re not self-doubting because you’re following the plan.
The whole self-doubt thing is natural. It is manageable. This lesson wasn’t supposed to be about just fixing all of this, but I want you to be aware of that. Many of you who are reading, I understand that about 50% of you already own a business. Some of you are already quite successful and you want to get from 6 figures onto 7 figures. I have about 40% of you who are making money for your companies, your employees or you have some side hustle already, but you haven’t been able to take that into the main business.
Quality always triumphs over quantity. In the long run, that’s the only thing that matters.
You have 3 or 4 side hustles. You are still doubting whether or not you could take a leap of faith and have a reason to expect that you’re successful. Those of you who are considering right now to start your own and you’re looking at that 90% failure number. You’re like, “Should I or shouldn’t I?” I wanted to give you a glimpse of the top reasons why people fail. If you think that you can handle any of these top five reasons, you’re going to be at the top 10% of people that do succeed and stay on course.
I hope you enjoyed this episode. I hope to do more of these little mini-lessons that I’ve learned because I hope that this will help you in your journey at least make a decision or clarify something that you didn’t know. Thank you so much for reading this episode and all the other episodes as well. Also, thank you for being so loyal. If you can, please leave me a review because a lot of people don’t know how to write a review. Apple does make it difficult to write that review. You’ve got to go all the way down to the end after you read the episode. There was a five-star or you don’t have to give me a five-star, just be honest. Write how this episode could help someone else who is struggling with the same kind of thing. If you can do that, I would be very grateful. Please stay healthy and happy. Remember, happiness is a choice. I wish you all the best. Thank you.