104: The Five Big Reasons Small Businesses Fail – Part 2

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Hi again! It's David. This is day 2 in the series, "The Five Big Reasons Most Small Businesses Fail And How To Avoid Them". Okay, today's topic is "Business Blunders". How to avoid them. Maybe you've even experienced some of the business blunders I'm going to pass on to you today. I've got three.

The first is choosing partners. Now we, quite often, we want to go into business. We don't want to do it alone. There could be that fear factor. That element of "I don't know everything", and we feel comfortable going and working with somebody else. That's great if you can work with each other and be compatible.

But one of the things is to be compatible is probably to have a different skill set. Somebody may be expressive. Good at the marketing, communications, talking to people. Another person, for example, could be good at the administration, the admin, the system side of work that needs to be put together. And the two of you compliment each other.

But what I see is choosing partners. One of the fundamental problems I see is they choose their partner too quickly. They assume, because they see somebody looks great, like that person on the stage. They look accomplished, they look as though they can deliver on what they say. And yet, they haven't done the checking. What I mean is, go back to the pyramid I described yesterday. Like the person you see as the ideal person it could be like the ideal partner in a marriage. That is the top of the pyramid, the very pinnacle.

But, because you haven't had the time to know that person really well, have they got the foundations, the systems in place themselves for what they do to deliver? Have they got the delegation skills or have they got the accountability that also comes? Have they got the track record? Have they got the proof, the testimonials that come? If they ain't got all this.. it's just the top of the pyramid, and it can all come crumbling down.

And there could be too much dependency on the other person. So you really want to know what they bring to the table from the outset. And what happens is if they don't well problems start arising.

And one of the common things I see first is goals. Do they have the same goals, objectives, that you're trying to do? Forget the money! What are you trying to do? What are you trying to do with the business in the next 12 months, in 2 years, in the next five years? What are you going to do together to grow that business to have it sustainable for the long-term? Not just for now and just bring in the next week's pay packet, if that's what you're looking (to do). You've got to take a mindset, "I've got a be in this for the long-term." That I'm going to grow something. It's like watching a baby grow when you're running your own small business.

And the common thing I see it time and time again. There is an element of distrust. The trust. Once the trust's gone, everything is gone! I'm going to ask you the question. Think about it, if you've been in business. What factor? What one key thing would bring about a state of distrust between two partners? What is it? Pound sign? Dollar sign? Have I got it the right way? The Euro sign? That's it! It's the money.

Once somebody distrusts the other, it comes back to money so often, and it's very difficult to repair. Because once there's that distrust it's difficult to move forward. And I've seen a complete disintegration of relationships based on money. And you both commit so much time and money and effort and trying to undo it is a nightmare. So be careful and watch out. They're my words of warning when it comes to choosing partners.

Number two, procrastination. Yes, we thought about it long hard when we an employee. We came and we said, "We've got an entrepreneurial mindset. We're a business owner. We want growth this baby. We want to see it develop." Except, you haven't got really the mindset. An entrepreneur, unlike an employee in many ways, will make a decision quickly, go with the gut, the instinct, and change seldomly. They will go forward. They will change their goals, move it, but they will not deviate from their basic way of what they were setting out to do from the outset.

So, you see it at presentations and seminars. How many times have you seen the same people going and buying another product, an Internet marketing product , a property product, a share trading? They jump from one to another, to another, and none of these systems work... for them. Yet they work other people, because what happens if they do, strike one, strike two, strike three and they're out. Because they're not "in it", and they're not giving the application that's really needed to give it a chance. Give themselves a chance.

Come on! You go to university for how long? You go for years and years and there's no guarantees. There's no guarantees if you get a job. There's nothing at all. And yet will devote so much time and effort to get your grades, go through the system, in a system that is so quite often out of date with what's going on, especially in the technological world, and the business and finance world. And yet, to be able to implement for a period of six months to get the skills sets, the new skill sets... they give up too often, too quickly. So, procrastination. Make up your mind. Go ahead and do it. And give yourself a chance.

And lastly, it's number three. What I call ignoring the warning signals. Maybe it was cosy in that office, or where you were working somebody. You didn't have to think about it. The economy looks bad. You've got to see about the changes in the market. Who your customers are? Are they changing because something came up in the newspaper? And what you're offering may not be the flavour of the month any more. Could you have seen it? I talk about seeing the warning signals from... it could be from seeing the leaders, the people seeing the changes.

I've got a person by the name of Harry Dent. Now I've known him for 20, almost 20 years, and seeing what he's been doing. For me, it is warning signal where I need to be going with my business next in anticipation and not too late. Because we like to follow and do what everybody else is doing. We feel comfortable in doing the same thing.

I saw it in the property market. Everybody was doing Buy-to-Let. Everybody was borrowing the money from the bank. And yet, I could see the market coming tumbling down. But nobody wanted to see it, believe it or acknowledge it. They wanted to do the same as everybody else. And so, your peers quite often can bring you down. They're going to be the ones that you don't wonder deviate from, and it's to your unfortunate misfortune, this can happen.

Entrepreneurs think differently and quite often they do the exact opposite of what everybody else is doing. Just think of the herd. The herd, as I've mentioned, the herd nearly always gets slaughtered. The little lambs go to the slaughterhouse and that's what happens to them. Because the entrepreneurs sees this, anticipates it and moves forward. Keeps moving forward cause they see it.

So, are you ready to think differently? To look at the warning signs? Do what it takes, not just in your business today, but for the future. That why I've put together this website showing the people that I've worked with for many years. People that I know, are verifiable, accountable, saving you the trouble.

So, this is David Lee. This is day 2, the business blunders. We're going to move on with day three tomorrow. Something else just as interesting. So I'll see you tomorrow. Thank you very much.