96% of businesses fail in the first 10 years. Yep 9 out of 10 fail. YIKES!
Business is a funny thing. Often times a person has, what Michael Gerber calls, an ENTREPRENEURIAL SEIZER. What does this mean? Well, what it means is that a huge portion of business owners go into business because they were GREAT at what they DO, for a living, and for some reason they get the idea… "Hey, why am I not doing this, for myself? Why am I making this bozo rich (thinking of their boss)?"
Then the next thing you know they get started figuring out how to build a business. The entrepreneurial seizure is that moment that they decide to actually go in business. But if you study business, you will find many entrepreneurs are not actually "entrepreneurs" at all. They are often TECHNICIANS that are GREAT at what they DO, but really have no idea how to run a business.
This was me. I was great at design. I was pretty good at website development. I was okay at marketing strategy, but I SUCKED at business. I didn't know a damn thing about business. Okay, that isn't true. In 1998 I got a book on how to run a graphic design studio. One book aught to do it, right? In four months (April 1, 1999) I was self employed and full-time on my own.
It was exciting! It was thrilling! I was filled with piss and vinegar and ready to take on the world… and I did. I had some mild success early on too. I was ranked the top web development firm by the Central Penn Business Journal (I started my company in Pennsylvania). Do to this success and a desire to grow bigger I moved my business to a larger metropolitan area, one where I met a girl. Yeah, we are now married, so that worked out.
Talk about cocky! In 2002 only 4 years in business I decided to move cross-country and start over in a large city where I knew no one, but my girlfriend. I floundered for a few months and got aggressive in the chamber and other business organizations. I grew a fairly good SOLOPRENEUR business, but I wasn't happy.
Something changed… in Pennsylvania my business was profitable. In Texas, the profitability piece was hit and miss and I couldn't figure out why. So, I started cracking the books and took courses and devoured anything I could find and learn about business.
I built a marketing machine that was getting me more leads then I have ever seen. Sadly many were junk leads. Was this a curse of a marketing agency or just not targeting the right audience? Or was it… sucking at converting leads into customers?
I then got professionally trained in sales and I tripled my business in 18 months. I got really good at professional sales (versus my pre-sales training days of what I call "amateur sales"), but was now struggling to scale the business. I needed PEOPLE, to DO the work. I outsourced for years. I tried hiring a few, but no one stuck. Yeah, I sucked as an HR person and at finding the "right" people. Then I realized I sucked as a manager, trying to lead the people I did find.
Then although I was great a marketing and damn good at sales, I sucked at prospecting for the bigger clients that I was now selling to. I went from selling several thousand dollar projects (corporate identity, websites, brochures, trade show displays, direct mail campaigns, and the like) to several tens-of-thousands of dollars in retainer relationships, starting around $40K annually. So, filling a pipeline of these ideal clients, that were doing $3MM to $10MM in revenues, was tough for me, but once I got them on the phone or had an in person meeting, I killed it and was great at selling them.
Then there was the books. I set up quickbooks before I started my company, basically when I was freelancing part-time. I did the books for the first 17 years. I was okay, but I hated it. This was not an area where I was best. I ran into problems several times, and each time, it cost me thousands to fix things. I struggled for 5-8 years finding a good accountant, but couldn't afford a bookkeeper at their firms. So I tried finding a bookkeeper. I found one and they worked remotely from another state. They had no interest in talking on the phone to review my books or answer questions and wanted to do everything through email. This sucked! So I went back on the search for a bookkeeper. I found another one in another state, but this one was fair and knowledgeable and would take my phone calls.
Anyhow, long story-short. Business is tough! I've seen my share of "failures" or what I call "learning opportunities". One thing I know for sure is business is a hell of a lot tougher than DREAMERS think it is going to be. By the way, a DREAMER is what I call a person that is thinking about starting a company or working part-time but not fully supporting themselves yet.
DREAMERS and SOLOPRENEURS often underestimate how long it will take to do anything and everything. They underestimate how much it costs to run a business. They underestimate how difficult it is to run a business and they underestimate how difficult it is to get and keep customers. Often they underestimate typically a hundred-fold and at very best 10x of their assumptions.
At the end of the day, this is why 9 out of 10 businesses fail, they under plan, underestimate, and really have NO idea how to run a business. To gain business knowledge, they read books, search google and do what I did… study their assess off. The problem though is there is TOO much information available, since we are in the information age. They try a bunch of it, with very few things working to their expectations. They get frustrated and jaded. I was that guy for many years.
So what is the solution? Well, the first step is join a community of like minded people. Start surrounding yourself with other business owners. Start seeking 5 strong mentors or coaches to guide and direct you. Hire professionals to tell you "WHAT YOU DON'T KNOW". You see, one of our problems is we DON'T KNOW, what we don't know. So we can not do a search, to find an answer to a problem we do not know we have. As I mentioned above, we might search for bookkeepers, or marketers, or sales training, or LikedIn training or HR training or whatever.
This solves ONE problem, but the business is still broken because if you are a technician and not a true entrepreneur, then you do not know how to run a business. Nor do you ever take a holistic approach to business. You just try to fix bits and pieces. In the title of this article I asked… would I have gone into business if I knew 9 out of 10 businesses fail? Maybe, but I know now, I should have looked a little more seriously into learning how to run a business and what makes a thriving business. Hell, I would have defined what a THRIVING BUSINESS was.
Because I have been there and done that, and made all the mistakes, but also figured out how to survive and simplify the complexities of business, I figured I may have some knowledge dreamers and soloprenuers, can learn from my journey.
Because of this, I have decided to create a MOVEMENT that I am calling The Business SUCCESS MOVEMENT. My goal in creating this movement is to leave the business community better than I found it. We are building a community of sharing and collaboration. The first step in creating this community is building a Facebook business community group that adds value to your life if you are a member. We are putting several programs in place to do this.
If you read this far, something must have struck a nerve with you, so I would like to invite you to join the business community that I am creating and start surrounding yourself with other like minded business people that are focused on business success.