7 minutes | Sep 5th 2017

102: The Five Big Reasons Small Businesses Fail – Part 1

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My name is David Lee. I'm the "Cash Flow Investor" and I'm here to give you this first of five presentations, video presentations, on "The Five Big Reasons Most Small Businesses Fail (And How To Avoid Them)". Is that what you want? Are you running your own small business, thinking about doing it, want a change, or you want to get into running your small business? Because of the economy, you've lost your job? Well, there are many pitfalls along the way. But I'm here to address these. To give you a helping hand on what you can do to progress, move forward, and build that business into what you are looking to do. Now many people look to get into their own small business and start their own business because they want the freedom. They want to be able to grow. They want to reap the benefits of what they're putting into their business. And so it's a great reason to want to do it, but it doesn't always work that way. You know the statistics... many businesses fail in the first 12 months to 2 years. Well there is good news! Many people don't fail and many people do succeed. But do you want some tips? I'll give you the very first one of today's presentation. What many people do is they just go about and end up replicating their job. Remember as an employee you didn't have to worry about things like accounts? You didn't have to worry about the tax. That was all taken care of for you. You just received your pay cheque at the end of the week or the end of the month. But you now, when you run your own small business, quite often you take what you were specialised at as an employee. You do exactly the same in your own small business. But then you realise you've got more things that you've got control. You've got a be in charge of your accounts, as I mention. Taking care of your tax file returns, keeping everything in order. Hiring a bookkeeper. You've got to know about marketing, because now you've got your own business, what good is it if nobody gets the find out about it? So the mindset of an employee is very different to the mindset of a small business owner. So that is one the big pitfalls. And many people do fall down when it comes to especially marketing their own business. This is one of the things I'll be covering later on in the series. The second reason I'd to discuss with you are... people get into their own small business for the wrong reasons! Yes the wrong reasons. Not everybody is suited or should be running their own small business. Because they're happy having things looked after for them at their place of work. Everything is taken care of. The systems are all in place. They don't have to worry about that. They just plug in and they're very comfortable doing that. Plus they love that the social aspect of having people around them that are co-employees. But one of the number one wrong reason I see is people jump into a small business because the money. The pound sign, the dollar sign, whatever it is... the Euro. It's just big and bold in front of them. They think they can they can grab it all that's out there for them rather than sharing it with their boss who they're working long and hard for. They can do it themselves. Well money is not the main primary factor for motivation! Remember when you were at your job? You got to a 2-3% pay rise. Well, how long did that motivation last? Rather you need to be thinking about what you can be doing.. the freedom. If you want that new house. If you want that holiday. If you want the lifestyle. Send your kids to a private school. These are more motivating factors to you, and I'm sure they will, but they will be a result of your efforts. And the fact that you can do that means you must have acquired the money in the first place. So please... I see it very often, people focus on the money. Focus on the outcome that you are looking to achieve and go to those goals. But another thing that I see as well. Have you ever been to a presentation on stage? It looked glamorous. It looked cool. It looked fantastic! And you were seduced. You were taken in by the presentation and you thought you could do that too. Let me tell you, running a business... running your own business is very, very different from seeing somebody present on the stage. It's like seeing a pyramid. And I see running your own business is building the layers, the foundation layers on top of that pyramid. Does that make sense? And quite often we get deluded or we are disenchanted or disillusioned when we see something that seems like a business-in-a-box. But that business-in-a-box is just the very pinnacle of the pyramid. But we forgot about all the layers that come underneath that make that business-in-a-box work. Because the biggest change has to come from within. It has to come from us. It's not only mindset. It's action set. It's implementation. Being prepared to fail before you can succeed. So, be careful about what you see and hear from the stage. You've got a see the results. You've got a see that it can work. Is it congruent with what you want to do? And are you going to apply it? Because too many people buy that business-in-a-box and it stays in the box or stays on the shelf. So it's got be something that's going to work for you and you're going to be prepared to put in the ground work and be prepared to fail before you succeed. And the last thing on today's presentation is that of a business owner. The mindset of a business owner is completely different to that of an employee. Are you ready for it? You've spoken to yourself, talked it over, maybe with family and you think you're ready. Well, what were you when you're an employee? Quite often you were a specialist. You could have been working for somebody. Doing accounting, a plumber for somebody. All that was taken care of and you were a specialist. But when you start out your own small business, in many ways, you've got a become a generalist. You have to know different aspects of your business. Not only the core function of your business, which could be that carpenter, that account, whatever. But you have to know everything else that goes on. Who are you going to delegate work to? Eventually you may do it all yourself, but you've still got look to be delegating as you go along. So you have to have a wider skillset. And the last thing, as a business owner, instead of being a follower that you may well have been as an employee, you now have to become leader. You have to steer your own ship. Are you ready for it? You are the difference! You make things happen! You make the pieces around you... the pieces are the people that you interact with. You are there to make sure that it all works. It all functions. So you really have to have a clear idea of what you're trying to set out. What the goal posts are that you're heading for. Who are the players that you are going to need in your team to help you get there. I hope that's covered enough for just to get you started. Some things that I call the common misconceptions that people have. But we can overcome these and it takes time, but with the right mindset and the right ways we'll discuss that in the next presentation. Thank you very much. This is David Lee, the "Cash Flow Investor". I'll see you on the next presentation.The post 102: The Five Big Reasons Small Businesses Fail - Part 1 first appeared on Instant Internet Identity.
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