If you’ve ever started a business and failed, you might feel terrible about the loss of time, effort. and money.
In fact, you may even have beaten yourself up for like lack of motivation, laziness, partnering up with the wrong people, and so on. Besides damaging your self-esteem, this type of thinking also misses the mark. You are only thinking about the things that you knew.
What Didn’t You Know?
What you did or didn’t do had less to do with your business failure than what you didn’t know that you didn’t know. In other words, your failure had probably little to do with the things you might think went wrong. Learning from your business mistakes isn’t just about listing all the obvious things you did wrong; it also includes finding out what you failed to learn in the first place.
If you want to try again, you have to be clear about why you failed. It usually has something to do with what you didn’t know. You may not have known the value of creating a solid business plan. You may not have known about doing due diligence on your suppliers and the quality of their products. And you may not have known about services like Hootsuite that would have made all your social media efforts coherent and coordinated. The reality is, however, that multiple things can go wrong when starting a business if it’s not planned carefully.
You Are Not Alone
If it’s any comfort, you are not alone. About 50% of all new businesses survive 5 years or more, and about one-third survive 10-years or more. Close to 66% of small businesses will survive their first 2 years. What these statistics suggest is that the more mature a business, the better its chances of staying in business; and they also suggest that about a third of new business will not make it to the 2 year mark. In short, the less a company knew about business, the faster the rate of failure.
Reasons for Failure
Ultimately, then, it’s what you didn’t know that caused your business to fail. Moreover, looking at the business landscape from a statistical perspective, most other small businesses failed for that reason too.
Here are 5 common things that many Black business owners don’t know that forces them out of business:
- They don’t know how to plan.
Lack of planning is when you ignore the value of planning and don’t bother to learn the methodology of planning. A good plan should include both short- and long-term goals as well as a way to measure goals and results. It should also have clear to-do lists, benchmarks, and milestones.
- They don’t know how to provide leadership.
Leadership is about motivation and inspiring the troops with a bold vision. It starts with building rapport by helping people fulfill their aspirations within the company. Leadership is essential; without it, it’s hard to make good decisions or take effective actions. Leadership affects every aspect of a business, from how productively employees work to how operations are organized.
- They don’t know how to manage people.
Failing to manage people arises from failure to listen to suggestions or complaints, micromanaging, and providing harsh criticism under the guise of constructive feedback. This not only lowers employee morale, but it also lowers productivity and teamwork.
- They don’t know how to market.
Marketing doesn’t start with learning how to use advertising and promotional strategies. It starts with product differentiation. Unless a company can clearly state why their product is different from others similar to it in the marketplace or come up with a unique value proposition, all its marketing efforts will be wasted.
- They don’t know how to win customers over.
There is no point in improving lead generation if a business doesn’t know its customers well or treat them well. Winning customers over starts with understanding consumer desires and tailoring products to meet those wants and needs. Treating customers well starts by following best practices when it comes to customer service.
What you don’t know you don’t know can trip you up the first time you start a business, but by learning what you missed the first time, you will increase your likelihood of success when you try again.