Failed Entrepreneurs is almost seen as a rite of passage nowadays. Instead of failure being shunned, it seems to be almost celebrated, people proudly discuss the many failures they have endured.
While failure may be celebrated amongst wildly successful entrepreneurs, their success isn’t a reflection for all entrepreneurs. For many entrepreneurs, failure is the only result they experience. When they sit back and reflect upon their mistakes, they begin to regret the many bad decisions that they made.
During this reflection period, they wonder what could have been if they would have made the right decisions. While it isn’t healthy to stay stuck in the past, it helps entrepreneurs make better decisions in the future when they acknowledge their previous shortcomings. It is best to know why you failed and to change your actions than to keep making the same mistakes over and over again.
The following are the 5 regrets that failed entrepreneurs tend to think about.
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1) Not Defining Target Market
Far too many entrepreneurs make the mistake of trying to provide their products and services to everybody. Being too broad about your customer base will stretch your attention and resources too thin. Everybody is not your customer, and therefore you do not waste any time or resources on people who are outside of your target market.
Your target market is a defined group of individuals who represent a specific demographic with shared similar interests. These interests are what influence their purchase decisions. Therefore you design your product or service around their interests, and must effectively communicate the value associated with your offering.
Not recognizing the importance of defining their target market is what gets entrepreneurs in trouble. When there is no specific target to cater to, there is no focus, so no consistent traction within the marketplace can be developed.
Successful entrepreneurs know exactly who they are providing products or services to. This allows them to develop effective communication, by knowing the exact needs and wants of their customers. Therefore they are able to produce the products or services that will be in great demand.
2) Not Understanding Importance of Network
Just because you are an entrepreneur, it does not mean that you are supposed to do everything by yourself. This type of mentality will only lead to a lot of frustration and a stagnant business. But so many entrepreneurs hold their business hostage by trying to operate the many functions of a business by themselves. It is simply impossible for one person to accomplish such a daunting task.
Business is all about maximizing your resources. And people are your most valuable resource as an entrepreneur, which means collaboration is a must if you want to build a successful business. You have probably heard the saying, “your network is your net worth.” Well, this is a very true statement that all entrepreneurs should follow. Who you know could lead to your next client or big opportunity.
When your business is struggling, you should have an established network to turn to for help. This help is not charity or looking for a handout, instead, it is for referrals. A customer being referred to another business by the business that they trust is a very warm lead. This is the benefit of constantly building your network. You surround yourself with other entrepreneurs who want to help you succeed.
It is no coincidence that successful entrepreneurs only choose to surround themselves with other successful entrepreneurs. This network of other ambitious individuals keeps you motivated and on your toes. When you see other people succeeding, you are literally forced to do the same – you cannot be the only one who is not constantly growing and improving. Your network is your source of healthy competition. You cannot procrastinate and slack off when you have others who are constantly pushing you to never become content – forcing you to do be better than your previous success.
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3) Too Scared to Sell
For some strange reason, it surprises entrepreneurs when they fail. They do not understand how failure could occur when they were so busy working in their business. And that’s the key reason why they fail. They were too busy working in their business, rather than working on their business. Working in your business means you are mostly doing administrative tasks and a lot of planning. These types of activities do not generate money. Working on your business is when your activities are focused on generating money.
It is amazing how many entrepreneurs hate selling their own products and services. They wanted to create a business to make money but they are not enthusiastic about the process it takes to generate a consistent flow of money. They rather have people ask to be sold to, rather than them having to initiate the conversation. This rarely happens. Selling requires for an entrepreneur to make people enthusiastic about their business, which means you must be confident in both yourself and your product or service.
Simply put, if you do not sell then you do not eat. You can have the greatest product or service in the world, but if no one knows about it, then it does not get purchased. An entrepreneur must make selling their primary focus. Set weekly and monthly sales targets. You must become obsessed with meeting and exceeding your goals. You cannot be afraid to get told no. Sales is a numbers game. Eventually, the many no’s will lead to a yes, which will soon become more consistent than the number.
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4) Too Price Friendly
As an employee, you traded your time for money. You did not become an entrepreneur just to do the same thing, and only to work harder than before. That does not make any sense. But many entrepreneurs end up doing exactly this and they do not even realize. They are an employee of their business, rather than being an owner of their business.
This happens when you price your product or services below the actual value that you provide. You are trying to be price friendly, building a job you manage rather than working to build an actual business. Being price friendly will find you constantly having to chase money because you are never making enough. In most cases, you will be losing money instead of breaking even or making a profit.
You can’t build a successful business by pricing your products or services based on cost rather than value. When you set a standard of providing your products or services at a low price, it is almost impossible to raise your prices. This is because your customers are purchasing from you based on your low prices, instead of the level of value you provide to them. So your business is never seen as valuable – it is just convenient to their budget.
5) Putting Revenue Over Profit
Having money come into your business does not mean it is actually making money. Revenue is the money that is paid to your business. Profit is the money left after paying your business’s expenses. You can have $1,000,000 in revenue, but only keep $5,000 of that or have a negative balance. This is due to not fully understanding how money works.
Analyze your profit margins and determine how much money you are really keeping for the amount of work that you do. If your profit margins are high in some areas and lower in others, you have to cut off the dead weight of the low-profit margins. Focusing more on what actually makes you money will help you generate more money. Now instead of working harder just to make money, you are working smarter, and making more money doing the same amount of work.
There are many reasons that a business fails, leading to many regrets being thought about. While failure can be disappointing, learn from your mistakes so that you can avoid having to deal with regret again.
Read More » Why You Should Say ‘No’ in a Business
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