3 Reasons Why Start-Up’s Fail (And How To Avoid Them)

Written by Wendy Mak

 

I don’t like talking about failure.

But if you’re starting a new side business or got an idea for a career-change, you want to go in with your eyes wide open.

These 3 reasons why start-up’s fail are the common mistakes I see – and I talk about how to avoid them below.

These 3 reasons all relate to initial planning. Doing the groundwork is CRUCIAL when it comes to starting a business.

Picking logo colours, dreaming about how you’d decorate your office and designing business cards may be more fun than mapping out how you will make money. But it’s this initial strategy that will set your business up for success, for life.

Many great entrepreneurs have passion, ambition or drive. But it’s rarely as simple as knowing that we’re good at something, throwing open the doors and hoping that customers will flock in.

If you aren’t a video kind of gal, here’s a quick re-cap (watch the video for the full run-down) of the solid foundation you need:

 

1. Have (really) clear + specific goals

Not having a very clear idea of what we want to earn, what our business is offering and doing and the structure of the business in 6 months, 12 months, 3 years and 5 years from now is kind of like saying “I know I want to end up in Mexico but I don’t know how to get there, what flights I need to catch, how much it’ll cost or how long it will take”.

To map out your plan + action steps, you need to know your destination (your goals).

 

2. Know who your target audience is

You might think picking a gender (“I target women”), a couple of age groups (“in their 30’s to 50’s”) is enough to describe your “ideal” customer.

The truth is you need to get MUCH deeper than that.

You want to literally visualise a single, individual person that is THE ideal customer for you. Being too broad means your communications + content + marketing is “all things to all people” and won’t hit the spot with a specific group – which results in lower conversions and lower sales. Being clear on this allows you to market in the RIGHT way because you know who you want to attract (and who you don’t).

 

3. Know how you make money

I’ve met lots of people that seem “successful” because they have a lot of notoriety – fame, celebrity, reputation, etc – but if you look under the hood, they’re not actually making (enough) money.

No matter what business you’re in, you want a solid profit model – so know what you’re selling, how you’re selling it and how much money you can make from it.

This isn’t from a place of greed – but if you want to make a difference in the world, you need a biz that is profitable and sustainable so that you can continue to do your work and make a positive impact.

 

Of course there are LOTS of other factors to consider when it comes to starting a business – but these 3 areas will ensure a solid base from which to build on.

 

As always I’d love to hear from you so join me below in the comments AND / OR share this if you have found it useful!

 

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By | 2017-09-18T10:35:06+10:00 June 25th, 2014|Start Your Biz|22 Comments

22 Comments

  1. Vicki June 26, 2014 at 10:19 am - Reply

    Thanks so much for this post & video Wendy. I am launching my new website and blog tomorrow and it’s been a long and solitary journey so far so having your snippets of wisdom has been so helpful. It’s been a fantastic learning experience but now I need it to generate an income so will be following your advice! Thank you.

    • Wendy Mak June 26, 2014 at 11:25 am - Reply

      Great to hear from you Vicki and hooray to you for the big launch!!!! You are never alone in this journey when you are here xxx

      • Vicki June 27, 2014 at 12:02 am - Reply

        Thanks Wendy. My site is http://www.boiledeggsandsoldiers.com. The idea behind it is that deciding what for dinner each night can be tedious (yes?) so I thought that I could take some of the pain out of the mundane and create a food blog giving simple, mostly healthy, mostly nutritious and most importantly quick and easy home cooked menu plans and recipe ideas that the whole family can enjoy. Plus a bit of girlie chat!

  2. Michelle Wood June 26, 2014 at 11:04 am - Reply

    Thanks again Wendy, great to be reminded of these things – even if you’re not a start up!

    • Wendy Mak June 26, 2014 at 11:25 am - Reply

      Thanks Michelle! Great to hear it was helpful xxx Thanks for always reading + connecting, really appreciate it!

  3. Rhi June 26, 2014 at 11:34 am - Reply

    Hi Wendy, I am in the middle of developing a business plan for my new business. I agree groundwork is really crucial, for me the hardest part is zoning in on a target market (even with my marketing background) it’s hard to a pick a key group/groups. I will endeavour though as your blog has reinforced how important this is. Thanks for the tips. Rhi

    • Wendy Mak June 26, 2014 at 11:52 am - Reply

      Hi Rhi – don’t worry you’re not alone – zeroing in on your ideal customer is one of the hardest (and most crucial) things to do. Just the fact that you know it’s important means you’re heading in the right direction. And be kind to yourself if you don’t get it instantly – I had to revise my target several times – the more I learnt about what was working, getting feedback etc helped me to refine it. Thanks for commenting + connecting xx

      • Rhi June 26, 2014 at 12:07 pm - Reply

        The word revise/refine is music to my ears! I need to remember that, the business is always a work in progress and keep listening and learning.

        • Wendy Mak June 26, 2014 at 12:19 pm - Reply

          You got it!!! We’re often forget our biz is always a work in progress. It’s never “set and forget” x

          • Rhi June 26, 2014 at 3:08 pm

            Thanks Wendy – Love your work!

  4. Alex June 26, 2014 at 11:36 am - Reply

    Always great content Wendy 🙂 I would love to see what Vicki has been working on and how she launches her website and blog… Long and solitary are great describing words for this journey of building a business 🙂 Could Vicki post a link here?

    • Wendy Mak June 26, 2014 at 11:56 am - Reply

      I’m sure Vicki would be happy to post a link when her site is ready! Glad you enjoyed the post xxx

  5. Nadia French June 26, 2014 at 12:02 pm - Reply

    Hahaha Wendy … When you talked about women being inclusive and trying to be all things to everyone, I laughed out loud because that’s so me 🙂 I’m actually working very hard on refining a product that will target my (non specific target market) that will make me money with little effort because I really don’t want to leave them out 🙂
    X Nadia

    • Wendy Mak June 26, 2014 at 12:46 pm - Reply

      Ha ha Nadia!!!! I did say these were the more common mistakes I’ve seen so you’re definitely not alone!!! 😉 It pays to get specific as your communications, marketing even future improvements will appeal better when you are addressing the specific needs of one segment rather than to a large group!! Good luck and keep me posted! xxx

  6. Marion Hall June 26, 2014 at 9:31 pm - Reply

    A great video Wendy. I really enjoyed it

    • Wendy Mak June 27, 2014 at 6:40 pm - Reply

      Thank you Marion!!!! Great to hear from you xxx

  7. Lyn June 26, 2014 at 9:43 pm - Reply

    Good reminders Wendy. Being specific n clear about those topics can b difficult (4 a newbie like me) but important. Thank You for posting

    • Wendy Mak June 27, 2014 at 6:41 pm - Reply

      You are welcome Lyn!! I’m so glad to hear it was helpful. Getting specific is hard. But super important xxx

  8. Michele June 26, 2014 at 10:37 pm - Reply

    Thanks for your advice Wendy.! Im new to this and while im overwhelmed at what my target market is exactly, it was helpful that you mentioned to think who i wouldn’t want.

    • Wendy Mak June 27, 2014 at 6:42 pm - Reply

      You’re so welcome Michele! Thinking about who you DON’T want is often one of the easiest ways to work out your target audience. I know you’ll get there, keep me posted!!! xx

  9. Amanda Cookson June 28, 2014 at 6:35 am - Reply

    Great video! I’ve developed a strategy for the next 6 months to a year, but haven’t thought any further ahead. I think that’s something I need to prioritise for sure.

    A major transformation in thinking for me is realising I can’t be all things to all brides, and I have to accept that. I’m working on it – I think, like a lot of things, it’s a confidence thing.

    Thanks Wendy 🙂

    • Wendy Mak June 28, 2014 at 7:39 am - Reply

      So glad to hear that Amanda! Long term thinking is what drives current decisions and I love that you have arrived at your transformation in thinking! Thanks for reading + connecting! xxx

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