Let's get right to it, shall we? We already know most businesses fail, and many entrepreneurs like myself have the scars and learning experiences to prove it. It really doesn't matter if you're in business to solve critical social and environmental challenges within your community as a social entrepreneur or running a traditional business. The fact is, the chances of failure while growing or launching a business are really high, and without the proper resources; Failure may be inevitable. However, I must also share that failure isn't fatal and we can learn so much from those experiences, but that's another story. Having had the opportunity to launch several businesses and work alongside many entrepreneurs; I've learned that a lack of empathy, financial literacy, subpar management & planning, poor marketing tactics, and not having a great team can be costly to purpose-driven entrepreneurs. Let's discuss...
Lack of Empathy
What is empathy, you may ask? Empathy is our ability to understand and share the feelings of others. Those feelings may be associated with pain points, experiences, or desired outcomes that could lead to a business relationship with your company. How would you know this? How do you know what others are feeling or whether or not they are looking for your services? You see...lack of product/market fit is one of the biggest reasons why most entrepreneurs fail. However, since we are doing business with people; We are touching on this from a human point of view and addressing this as a lack of empathy. In order for us to know if we have a product or service that other people want or would pay for, we have to find ways to learn more about them, their pain points, and their experiences and feelings. For example, we got here by learning more about you and some of the challenges that underserved social entrepreneurs experience while growing or launching a business. There are many ways to get in front of your ideal consumers and get valuable feedback from a target market which could help you empathize with your audience. We’ve used a few methods including feedback surveys, interviews, and our Community Brainstorming Sessions to document and evaluate feedback. Whichever method you choose, know that one of the best ways to build a product that people want is to let them tell you how and why they want it.
Ok, let’s refine this and clarify before going any further. In our case, we mean financial literacy for you and for the purpose of growing a profitable business. The lack of financial literacy as well as access to qualified financial professionals may not only affect your relationship with money; It may also affect the pricing of your products or the profitability of your business model. We know that in relation to money; Most businesses fail simply because they ran out of cash or weren’t making enough of it, to begin with. So why is that? It is important for you as a social entrepreneur or purpose-driven founder to know your numbers and know how to forecast the financial health of your business; because not doing so may lead to you not being able to effectively make changes that could keep your business from running out of money or obtain the working capital you need to fund your business operations.
Business Management and Planning
In my line of work, both as a strategic consultant and a program coordinator of a small business program at Miami Dade College; I’ve come across and worked with many entrepreneurs who’ve been in business for years without having a business plan or any management training. So, let’s take a step by and evaluate... Is your business going according to plan? Are you equipped with the proper skills, and knowledge to manage a rapidly growing business? The lack of business management skills or planning has proven to be problematic for many entrepreneurs, even with a great product that’s selling. Now, regardless of what the bad news can be; I’ll tell you that the good news is that it’s never too late to start working on your business plan, learn new management skills, or reach out to experienced executives who can help you build a great management team. Do not let poor business management and planning stand between you and your wins.
Yes, I know this may seem a bit cliche since we all know that every business needs marketing. However, it is important to know that all marketing efforts are NOT created equal. In order to drive sales that can keep your business growing and trending in a positive direction; Marketing must be done, measured, and planned the right way for your business. I don’t believe that there’s a one size fits all marketing plan, and you shouldn’t either. While I am not a marketing expert or manager; One of the things that I learned very early on in my entrepreneurial career is that it pays to seek help in areas that I am not an expert in or could use some help with. Improving your own marketing skills and knowledge base is just one way of getting the job done. Another way of giving your business a better shot at winning is by simply working with a marketing consultant or reputable firm that can help you get the results you need to keep your business growing.
Lack of a Great Team or Talent
This one really can go without saying much else or elaborating on, but too many entrepreneurs and small business owners struggle to build a great team that can execute and help them grow a successful business. That is such a critical consideration because you can only do so much by yourself or with a small team. As a minority entrepreneur who’ve launched several businesses while being underserved with limited access to business resources in my local communities or initial network, I can empathize with social entrepreneurs who must manage to do more with less; in terms of talent. As an athlete, I also know this well. Having a great team is critical to your vision and your company’s ability to take the venture to its next level.
There are many reasons why entrepreneurs fail in business, and we may have only covered a few of them here by discussing the need for more empathy, business finance education, management, marketing, and having a great team. We hope you found this list useful and know that it is not too late for you to make some drastic changes that can help you launch a great idea or scale an existing business.
Here's what you can do today...
Hey, from one Founder or community member to another; You got this. You may be underserved or lack access to some critical resources that you need to grow your business or professional network, but know that we have each other. Also, know that socialaim.co was built for you. If you haven’t plugged in already, check out this blog to see our we can help.
Note from the author: Emmanuel is the founder & executive creator of socialaim.co. He's passionate about social entrepreneurship, innovation, and community building. He is a seasoned entrepreneur with 16+ years of business and professional experience. Over the years, he's valued the opportunity to do business and gain working experience while learning from various industries such as banking, sales, marketing, real estate, and management. You may connect with him by clicking here.