REASONS OF ENTREPRENEURIAL FAILURE
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Transcript of REASONS OF ENTREPRENEURIAL FAILURE
REASONS OF ENTREPRENEURIAL FAILURE
BY: RABIA RASHEED & WAJIHA HAQ
YOU HAVE EVER FAILED…???
FAMOUS FAILURES
DIFFERENCE BETWEEN LOSER AND FAILURE
HAVE YOU EVER FAILED?
YOU MISS 100% OF THE SHOTS YOU DON'T TAKE. WAYNE GRETZKY
The tale of entrepreneurship doesn't always have a happy ending, and raising money isn't always the answer.
REASONS OF FAILURE
No Viable Market What if we launched a business and nobody showed up?
NO VIABLE MARKET
Market Research Talk to Your Customers Identifying Customer Needs
POOR EXECUTION
• Evaluation of Your Skills• Choosing Correct Opportunities• Professional Team & Manager• Discipline is Important
Too Much Leverage Give me a lever long enough and I will bankrupt my company
TOO MUCH LEVERAGE
Delay Making Investments Delay Taking on Fixed Obligations
Undercapitalizing the Business
Lack of Competitive Advantages Never bring a knife to a gunfight!
UNDERCAPITALIZE THE BUSINESS
Don’t Underestimate the Time and Capital to Reach Breakeven
LACK OF COMPETITIVE ADVANTAGE Good Location Proprietary Technology Cost Structure that cannot be
Replicated Create Additional Barriers with
the Passage of Time
Competing Head-to-Head with Industry Leaders Better sharpen those elbows...
COMPETING WITH INDUSTRY LEADERS
Sharpen Your 4Ps’ Strategies
Develop a Professional Team
Picking a Niche That is too Small Don't be a market of one!
PICKING A NICHE THAT IS TOO SMALL
Specialize in Niche Market Niche Should Support Your Business Customers Should Not be Expensive
Breakup of the Founding Team
Breaking up is hard on you -- and your company.
BREAKUP OF THE FOUNDING TEAM Handle Disagreements Carefully Structure Agreements Treat Every Employee Fairly Respect Everyone’s Point of View
and Interest
Poor Pricing Strategy
The price is right?
POOR PRICING STRATEGY
Focus on Pricing at Earliest Stages of Business Plan
Pricing Based on Cost Structure Pricing Based on Product’s
Perceived Market Value
Growing too Fast What goes up...
GROWING TOO FAST
Move Progressively Finance Fixed Assets with
Internal Cash Flows Focus on Cash Flow Rather Than
Profitability
HEARD STORIES OF FAILURE TO SHARE…??
SOME OTHERS REPORT…
Loss of revenue Poor business models Management/operational issues Lack of capital Credit/debt issues
Lack of planning Trying to make a hobby into a
business Inexperience in managing a small
business Poor record keeping and financial
controls There is a difference in oppurtunity
and new idea Dependence too much on a single
client
Poor selling techniques Inferior quality customer service