1.Faulty business model
No business can thrive without an implementable business model. In business, one size does not always fit all. Your business model must be well thought out, well laid out and must be made to measure in accordance with the vagaries of what you intend to do. What is your strategic plan for your business? Is it implementable and time tested? Will it be able to withstand and survive the impending shocks that will definitely rear its head? Are you making use of that model because some people you know did likewise and it worked for them? Run a test on your business model, watch the indices and see if it adds up.
2. Taking off with un-sustained hype
Your business mustn’t necessarily be located in that expensive business district neither must you employ 10 staff at a go. Your business mustn’t run an ad on CNN neither must you buy that expensive brand new car as your official car. Just begin with what you have because as it steadily grows, things will pan out naturally. This readily brings to mind a foremost telecom company which ran into troubled waters few years ago. The management incongruously kicked off a promo where they doled out hundreds of millions of naira in airtime and sundry gifts to subscribers with the hope that it will ultimately boost their bottom line. It was one great fiasco! Their marketing strategy backfired and further pushed them to the brink of receivership from a consortium of banks they were indebted to. I must reiterate that while running a business, forget the hype and just be real. If you thrive on hype, in the long run you might be unable to sustain it and before you know it cracks will begin to appear.
3. Poor strategic planning
It’s often said that if you fail to plan, you inadvertently plan to fail. This is over and above the conventional deficit in financial planning. It involves deficiency in feasibility studies, poor due diligence and inadequate financial intelligence. These three things cannot be overemphasized. Tesla CEO, Elon Musk once said ‘’the business world is a jungle. So be adequately prepared for whatever comes you way by consistently and continuously planning.’’
4. Failure to understand and adequately satisfy your target market
If you don’t understand your target market (i.e. demographics and needs) you will be unable to satisfy them. Get to the core of your customers and prospects by segmenting them. You must have a substantial knowledge of their needs before knowing if you have the capacity and capability to satisfy them. Failure to do this, will be similar to playing a deadly game of Russian roulette with your business.
5. External influence from family and friends
The rule of thumb in business is to never mix business with pleasure. If you want to involve your family and friends in your business, please by all means take necessary precautionary measures! But remember to definitely set parameters. Each person’s role must be defined i.e. job descriptions/title/salary structure. Also ensure there are checks and balances else you risk getting your fingers burnt. Long time ago, I heard about how a certain well-to do young man decided to help his family members, by recruiting some of them as staff of his company. It was a complete disaster as his siblings almost ran it aground with their brash entitlement mentality and lack of cognate managerial and corporate experience. Remember to never mix business with pleasure/family and if you must, it must be business-like and devoid of emotions or sentiments.
To be continued…