I recently realized that sometimes, business owners seem oblivious to economic, social and planning factors, which can bring them down. I have been the board chair of an association of businesses committed to a wonderful social cause, but I have been increasingly concerned that some feel that their social enterprise will somehow survive because of their “common good” commitment.
Business startups fail frequently but all do not need to. Many problems can be avoided by seeking wise counsel. This comes in the form of coaching, consultant experience, or even by having a mentor. It may be time to think about some of the most common reasons that businesses don’t succeed. Think about these reasons discovered by IBEC Ventures during 18 years of coaching missional businesses. Many mistakes can be avoided by taking the courses offered by Third Path Initiative, especially the Lean Startup course.
- _____Doing it Alone (Founder/CEO tries to do it all themselves without necessary networking, collaboration, and teamwork. Failure to delegate).
- _____ Inexperienced in Business (Underestimates how difficult it is to build and grow a business; trying to do it part-time and/or without the necessary knowledge).
- _____ Lack of Situational Awareness (cultural understanding, international business acumen, and ability in the language are important).
- _____ Lack of Capital (It always takes more than you think; failure to consult with others who have done something similar and firming up a realistic financial spreadsheet).
- _____ Lack of Problem Identification (Failure to understand the problem to be solved and if the target market can pay for its solution; i.e. markets).
- _____ Weak Business Modeling and Planning (Has a Proof of Concept been validated? Does the Value Proposition hold? Is the customer clearly identified? Can the problem be solved?)
- _____ Poor execution (Tactical execution of the plan is essential; has the plan been evaluated, monitored and updated?)
- _____ Integration of business and ministry (The social and/or spiritual focus must be intentional. It helps to have a ministry plan and a business plan, then integrate them).
- _____ No Risk Assessment (Is there a backup plan? Are you capable of pivoting? It is vital to spend time clearly thinking through what the unexpected might be like).
Larry W. Sharp, BAM Support Specialist, IBEC Ventures
Larry.Sharp@ibecventures.com