John Barksdale - 3 Reasons Why Start-ups Fail
John Barksdale, a famous business mentor quotes Zig Zaglar who once said, “You were born to win, but to be a winner, you must plan to win, prepare to win and expect to win”. While there are great examples of entrepreneurial ventures that took the world by storm in the last decade itself, there are more whose stories are lost mid-way. Successful entrepreneur John Barksdale says that these three are the most common causes of failure.
1. Not understanding the market
In the excitement of an idea, most people often forget to ask, “who’s going to buy this?”. If there is not an adequate market where you can sell your products, there is a big chance your ship will sink. People getting excited over a free product may not necessarily mean they will be excited once you ask them to pay for it. There has to be a demand in the market or at least a great potential for a demand for your product. Study and understand the market first before launching.
2. Cash flow
The nemesis of all entrepreneurs; cash flow is one of the most common reasons for a business to die out. If you do not have a steady flow of cash, you will not be able to survive for long. Therefore, having people on board who are good with handling cash flow and ensuring some source of investment are good ways of stopping this boat from sinking. It takes some time to start making profit and earning enough cash for the business to be self-sufficient. A lot of start-ups go 90% of the way and then die out because they have run out of enough capital. There are few, rare instances where an idea started to reap profits almost from the beginning. Get some investors on board, identify other sources of investment, before venturing into something.
3. The team
Not having the right team or not having a team at all is the other reason for failure. Investors not only look at the idea and the owner, but the people who will be working on it. In a start-up when the core team is a small group of people, their equation needs to be solid. They need to believe in the same vision and commit as much as the founder would. The first few years of a business is hard work and often requires long hours. Therefore, people who have similar work ethics as well as strong industry knowledge are people who should be in your team. Compromising on the quality of team members in the initial stages could affect the overall quality of work.
Learn more about John Barksdale:
Google+ - https://plus.google.com/ 109940811731912651641
Twitter - https://twitter.com/ jbultimate7
Facebook - https://www.facebook.com/ iamyohanan/
1. Not understanding the market
In the excitement of an idea, most people often forget to ask, “who’s going to buy this?”. If there is not an adequate market where you can sell your products, there is a big chance your ship will sink. People getting excited over a free product may not necessarily mean they will be excited once you ask them to pay for it. There has to be a demand in the market or at least a great potential for a demand for your product. Study and understand the market first before launching.
2. Cash flow
The nemesis of all entrepreneurs; cash flow is one of the most common reasons for a business to die out. If you do not have a steady flow of cash, you will not be able to survive for long. Therefore, having people on board who are good with handling cash flow and ensuring some source of investment are good ways of stopping this boat from sinking. It takes some time to start making profit and earning enough cash for the business to be self-sufficient. A lot of start-ups go 90% of the way and then die out because they have run out of enough capital. There are few, rare instances where an idea started to reap profits almost from the beginning. Get some investors on board, identify other sources of investment, before venturing into something.
3. The team
Not having the right team or not having a team at all is the other reason for failure. Investors not only look at the idea and the owner, but the people who will be working on it. In a start-up when the core team is a small group of people, their equation needs to be solid. They need to believe in the same vision and commit as much as the founder would. The first few years of a business is hard work and often requires long hours. Therefore, people who have similar work ethics as well as strong industry knowledge are people who should be in your team. Compromising on the quality of team members in the initial stages could affect the overall quality of work.
Learn more about John Barksdale:
Google+ - https://plus.google.com/ 109940811731912651641
Twitter - https://twitter.com/ jbultimate7
Facebook - https://www.facebook.com/ iamyohanan/
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