| My research shows that this will be one of the most | | | | consumers. They are also the downfall of many |
| widely read articles I will ever write. For whatever | | | | business ideas because of the specific demands of |
| reason, people want to know why businesses fail | | | | niche markets and the high cost of customization. |
| more than why they succeed. So this is for all the | | | | 6. Government intervention. There are a slew of |
| critics (and worriers) out there. Here are Ten Reasons | | | | regulations that cover consumer and environmental |
| Why Companies and Products Fail. Enjoy! | | | | safety for new products. Those hurdles must be |
| | | | overcome in a timely fashion for a company to make |
| 1. Lack of good ideas. Brainstorming is an absolutely | | | | a return on its investment. Yes, I just put the words |
| essential part of new ventures. If a company wants to | | | | "government" and "timely fashion" in the same |
| produce one product or service that sells, it must first | | | | paragraph. |
| come up with numerous ideas that have some | | | | 7. Poor marketing. After sinking time and money into |
| potential. Most businesspeople and entrepreneurs I | | | | brainstorming, product development, safety controls, |
| know brainstorm a minimum of fifty ideas before | | | | and government forms, the company must now |
| narrowing it down to the one on which they will | | | | market whatever it is they are trying to sell. This is a |
| actually work. | | | | problem if production costs have soaked up more |
| 2. Production time is too slow. One of the ways | | | | cash than anticipated. No matter how much you |
| businesspeople narrow down ideas is based on the | | | | believe in Guerilla Marketing (and believe me I am a |
| amount of production time it will take to get the | | | | fan), you are going to need a fair amount of cash to |
| product to market. A mentor of mine suggests adding | | | | fuel your growth. |
| twelve months to any estimate I make in production | | | | 8. Poor product or service design. Some companies |
| time for new products and services. I have found his | | | | don't realize that they have a poor design until they |
| advice to be invaluable. It always takes more time than | | | | have spent thousands developing and marketing the |
| I think to complete a major project. | | | | idea only to find that consumers completely reject it. I |
| 3. Production costs are too high. Of course, this issue is | | | | can hear the collective "Ouch!" from many formerly |
| a cousin of Slow Production Time. Those twelve | | | | frustrated but now highly successful entrepreneurs and |
| unplanned months of salaries, vacation days, holidays, | | | | executives who have been down this path before. |
| health benefits and sick days can put your company in | | | | 9. The company didn't listen to consumers. Spending a |
| a significant cash crunch. | | | | few thousand dollars on market research is much |
| 4. Voracious competitors. Everyone has seen a | | | | better than spending tens of thousands or more on a |
| National Geographic or Discovery Channel episode | | | | failed product. Now for the final reason why |
| about the African Savannah, right? Well, once you | | | | companies and products fail... Drum roll please... Wait |
| start making money, your competitors will close in like | | | | for it... Wait for it... |
| vultures on a wildebeest. Alternates to your product | | | | 10. They don't deliver on their promises. |
| will begin to spring up out of nowhere like yellow | | | | I was tempted to end this article after the words "Wait |
| thatching (google it). | | | | for it..." and let you figure it out on your own, but that |
| 5. The introduction of niche markets and customization. | | | | would be cruel. |
| Niche markets and customization are great for | | | | Here's to your success. Avoid these pitfalls at all costs. |