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Fremont: A number of businesses fail every now and then--some rise from the ashes like the phoenix, while some fall to the ashes. It is normal for entrepreneurs to do a post mortem on why they failed. These reasons are like a rule book, which makes them learn from their mistakes. Once the failure is known to the outside world, they tend to mould it according to their thoughts. After the failure of many an entrepreneurs, there are a few myths surrounding their fall. What are they?
It is common for many entrepreneurs to feel that they lost focus from what they were supposed to do. This might not always be true. It depends on the focus of the entrepreneur. For small businesses, short-run results are more important than what would their condition be after say five years. While it is different in case of large enterprises, for whom it is more important to plan for the future. Entrepreneurs can set a base line and fix their targets in accordance with that. A daily target might help entrepreneurs to refine their goals and get a better idea on whether or not they are on the right track.
Successful companies are those who have more of sales rather than more of contacts. An entrepreneur should try to venture into new markets, make his product available to the masses, so as to increase his revenues and reach the break even. Though attending events, conferences, sharing business cards might be valuable for an entrepreneur, the payout ratio is very low. Also, it will take a lot of time and money. Thus, focus on your sales, and people will come to you, they will get to know you and your contacts will increase.
People feel that new companies charge low, which reduce their profits, and hence lead to their fall; but it is not so. Entrepreneurs feel that the price they are charging matches upto the amount of time and investment they have put into the products. But they forget that without a track record, they would not be in a position to charge premium charges. Hence, they should keep their operational costs low and charge less for their products. This will attract more customers to the product, putting the entrepreneur in a position where he will be able to charge differential or premium charges.
Expanding your customer base would be a great achievement for any entrepreneur, but the costs of acquisition of newer customers is expensive. Hence, many entrepreneurs find it difficult to expand to markets. But have you ever thought that instead of hunting for newer customer; why not expand more into the existing customers? Entrepreneurs can try to cater to other needs of the existing customers and ask them if there is anything else that they can help the customers with. The venture might gain more reputation and revenues by expanding their capabilities rather than their markets--though they should surely focus on expanding onto newer arenas too. But, they might fare well in the short-run by catering to various needs of the existing customers.
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