We have compile the top 10 reasons why entrepreneurs fail. From no market need to being too early, a lot of these issues can be avoided.
1) No market need: 42 percent
This is what is called a solution looking for a problem. When a product/ services, app, gadget, etc. is created because the entrepreneur thought it was clever, it runs the risk of not having an actual market problem that it solves. As an entrepreneur, be sure your product is providing solution to specific problems. Do more research on the problem your product / service would solve
Solution: Don’t fall so in love with your idea, that you fail to fall more in love with solving a market need.
2) Ran out of cash: 29 percent
Pretty self explanatory. There are so many little costs of starting a business that can really add up. From buying URLs and website hosting, to designing and printing business cards, several hundreds of thousands here and there can quickly turn into millions.
Not excluding different tax structures in Nigeria. You need to factor this into your costs.
Solution: Plan for your startup costs to be double what you estimate.
3) Not the right team: 23 percent
Friends are fun to work with, but their skill set may make things more difficult causing a lot of stress and tension. Bringing on a team is important for any small business, but the right team is crucial.
Solution: Honestly assess your skill set and identify the holes. Find team members who believe in your mission and have the skill sets you are missing.
Got outcompeted: 19 percent
It’s never healthy to obsess over your competition, but you shouldn’t ignore them either. When a competitor comes out with a similar product or service, you should know it in and out and be able to articulate why you’re better.
Solution: If you’re not better, work until you are. Be careful not to put your blinders on and only modify your product to beat your competitor. Work on your product to make it better and easier for your customer.
5) Pricing /Cost issues: 18 percent
Pricing can be relative, but it needs to be well communicated and tested. Throwing out a price to your customers without a balance of value can make some people skittish about doing business with you.
Solution: Test, test, test. You may find that price isn’t an issue – value is. Test prices/payment plans, etc., until you find one that is converting the best.
6) User un-friendly product: 17 percent
Even the best idea can be muddled and tarnished by a bad user experience. If it’s just too hard to use, it won’t be used.
Solution: Have a “friction journey” meeting with your team or even a group of customers to identify every point in your product or service where a customer might experience friction. Work to eliminate those areas or even consider a DFY (do it for you) service for your customers until it’s fixed.
7) Product without a business model: 17 percent
It’s hard to scale when a business model isn’t established. A clear path to growth needs to be evident in order for your team, customers and potential investors to buy in.
Solution: Research and decide on the best business model for your product. Middleman? Subscription? Wholesale? Get clear.
8) Poor marketing: 14 percent
If all of your capital is spent in product development and nothing is left over for marketing – you’ve got a big problem. Acquiring customers, getting known and creating a brand can be very hard, and as a result, gets ignored.
Solution: If marketing isn’t your strong suit, see #3 above or hire a firm. Make sure the marketing firm you hire has a track record of measurable success in your area.
9) Ignore customers: 14 percent
Customer service and feedback is manna from the gods. Don’t let this lifeblood spill. If your customers are being ignored, their questions unanswered or simply poor customer service – they’ll share. If you aren’t listening to their feedback or providing features or services they don’t need or want, they’ll go elsewhere.
Solution: Never ignore your customers. Always share their feedback with your team and work to resolve any issues they have.
10) Product mistimed: 13 percent
Sometimes a product is just too early or too late to market. Getting caught up in the development of your idea can leave your target market scratching their heads. This is where customer feedback comes in to play as well.
Solution: Keep customer feedback front and center here so that you aren’t launching things they don’t understand or things they don’t have use for anymore. Stay relevant.