Will Your Business Plan to Fail?

by Michael Rinaldi

Most individuals who want to become an entrepreneur begin their enterprise as a small business owner. Usually, they start as the ‘self-employed’, which is really just having a job that you own as opposed to a job you work at which was created by another business. The expansion of one’s business requires immense effort and at times innovative techniques in order to survive, let alone flourish and prosper.

The most important aspect for success however, is a neatly sorted, practical business plan. The lack of one on paper is one major reason for failure. Everyone has heard the old adage, “a failure to plan equates on a plan to fail.”

However, lets assume that you are in business (or are going into business) and have survived for a while. Congratulations. Pat yourself on the back. But realize, past performance does not guarantee future results.

So let’s examine other reasons why small businesses fail.

Can’t, Won’t, or Don’t Get the Word Out.   

If there is any one particular area of why businesses fail it is definitely the lack of marketing that is usually at the heart of a dying business. 

Now, it’s one thing to say that ‘if nobody knows you exist, it doesn’t matter if you’re the best therapist in the world, they won’t come’. But, if people are vaguely aware you exist, you may do better.

Since the enterprises are new, they do not have enough idea, or experience of how to tackle the competitors or how to demand attention in the market.

But for all intents and purposes, you must be within the top three of your public’s top-of-mind awareness (TOMA) in order to really be cooking as a stably growing business. Capturing that is not that hard; maintaining it over time is another story.

GoDaddy got everyone’s attention with their outrageous Super Bowl ads a few years back. But, most people didn’t really know who or what they were all about. Why? Well, there was relatively no follow-up to their fantastic ad on TV. You had to wait a couple years later until they did it again. But, if you were curious enough to search them out online, you learned what the company is all about. 

No mon, no fun. 

Lack of capital to finance the start up, growth/expansion phase or acquisition can certainly bring the joy ride to an end quickly.

Go back to the late 90’s when the tech bubble was about to burst. Nobody had any idea who would be the winners or losers in e-commerce and few of the analysts had any idea how to ‘valuate’ the businesses. Silly.

Analysts were calculating “burn rates” for businesses which was a measure of how quickly they used up their cash. Traditional valuations were overlooked. (Stupid) 

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