Failure. It’s a topic we don’t talk about very often as small business owners, likely because the idea of it is terrifying. Even in difficult times such as now, it’s easier to just brush past the topic and pretend that everything will work itself out.
Unfortunately, it’s not always so cut and dry. In the years I’ve been in the industry, I’ve seen many amazing companies fall to the wayside due to a number of different reasons. At the same time, I’ve seen just as many companies thrive and scale to unbelievable heights. So, really, asking what makes a business fail is the same as asking what makes a business sustainable.
As shocking as it seems to see small businesses shut down, the numbers don’t lie — around 30 percent of entrepreneurs go out of business in their first year. Within five years, 55 percent of those entrepreneurs have closed shop. By the ten-year mark, 66 percent will have shut down. That means that only a third of small businesses will survive for more than a decade.
So, where are business owners missing the mark? What are they doing wrong that causes two-thirds of small businesses to eventually go under? We’re all works-in-progress, but what are the mistakes that are causing entrepreneurs to actually close their businesses?
Not knowing where to go
To run a successful business for years, decades even, you need to have a clear path of where you’re going. It does not mean that it needs to be a straight line, and it certainly doesn’t mean that your journey will go exactly as planned. You don’t have to be able to accurately describe where you expect to be in five years. However, you do need to have an idea — you can’t go through business blindly, only planning for the following day.
“It is key for the owner to always stay focused on a growth mindset. This means constantly looking for ways to improve their product or service, produce higher sales, increase their team, and build a culture willing to take risks to get to the next goal,” shares Shannon Tarrant founder of the WeddingVenueMap.com.
If you’re feeling uncertain about your direction, find someone who can help. I hired a financial strategist who made me face those difficult questions and put the numbers down on paper so I could get a big-picture view of how my business could look in the future. Only then could I map out and visualize real, concrete goals that I could strive for and effectively grow my business. Write out your aspirations or create a vision board of your goals, then stick it up somewhere you’ll see it often. Studies show that those who see a physical manifestation of their dreams tend to achieve them quicker than those who keep them in their head.
Thinking you’re different
I hate to break it to you, but you’re not (at least, most of the time!). So many people come into a market thinking they’re the first to do something or that their idea is the most innovative thing out there. More often than not, it’s already been done — that’s just the way of the game in an oversaturated market. To think you’re different is short-sighted and can instill a false sense of confidence that can break a business before it really begins. Understand that, in the wedding industry, you’re 100% not the first person to come up with an idea. That’s not to say there isn’t room in the market for you, but you need to be comfortable with the fact that you’re not a one-of-a-kind unicorn.
Competitor analysis is key to success; you need to know who else is out there and what they’re doing. Then, test your idea and make sure there is a need for it and that nobody else is doing it the way you’re doing. You can offer similar products or services as someone else, but you need to find a way to stand out from the competition.
Making assumptions about clients
Assuming things is always a dangerous game, especially when it comes to your business. Just because you think something is a great idea doesn’t mean it’s going to sell if your prospective clients do not want it. So, this goes back to the idea of testing. Before investing all of your time and money into something (whether it’s a new product to offer or an add-on service), first find out if it will really be successful.
When I was in the early stages of planning my wedding PR membership program, I started out by recruiting beta testers to ensure my idea was one that would be impactful. I ended up getting lots of great feedback (some which improved this very platform) and only launched once I was confident that the product was valuable and needed in the market. If you have to do a lot of convincing to make a sale, it’s not going to be in your best interest. It needs to come naturally from knowing what it is your clients truly want (even if they haven’t yet realized).
Ignoring data for anecdotal success
Getting some great wins can leave you feeling on top of the world, but you need to have the numbers to back it up. It’s exciting to book a big speaking engagement or woo a highly sought-after publication, but those things don’t mean much if the books are in the red. What matters is how many conversations you’re making compared to proposals sent out. It’s the X amount of revenue that you can attribute to the Y strategy. You have to understand the data and what the numbers really mean for your company.
For example, how should you know if booking an ad with a certain publication is worthwhile if you don’t look at how many inquiries you gained from it last year? Data is where you can discover what works and doesn’t work for your business. Stories are just stories, whereas your ROI can show you the real picture.
Valuing creativity over organization
In an industry full of creative professionals, there’s a lot of value placed on ideas. Yet, creativity is no excuse for being disorganized or perpetually late because one’s calendar wasn’t in order. To put it bluntly, being creative isn’t a justification for being a hot mess. Being organized is part of being a responsible and effective business owner, whether or not you consider yourself creative.
Considering how competitive today’s market is, you need to prioritize organization if you want to continue standing out from competitors and booking new clients. Keep up with your inboxes, your to-do lists, and your schedules. If you’re struggling, find a solution that works for you, whether it’s a mobile app or a mindset change. Whatever it may be, it’s worth it if it means setting up your business for future success.
Depending too much on anything
When you a run a business, there are so many things out of your control that you can’t rely on any single entity beyond yourself for success. This has been made abundantly clear, especially in the last months.
If, for example, you get all of your business through referrals from a certain colleague, where will it leave you if they shut down? Or, if you use all of your ad spend on one publication, what happens if their site goes down for a week?
That’s why you must diversify your efforts. Mix up your marketing strategies and broaden your horizons in terms of referral business. The more directions your business comes from, the less impact you’ll take if something happens out of your control.
Saying ‘yes’ to the wrong people
It seems like the word ‘no’ is a difficult one for many people, especially small business owners. We are constantly inundated with opportunities from all directions, it’s easy to lose sight of boundaries and say ‘yes’ to anything that presents itself. However, a smart entrepreneur is picky with how they spend their time. They say ‘no’ to the styled shoot that doesn’t really add anything to their portfolio or to sitting on a committee in the peak of busy season.
I’ve made it a habit to always ask myself, “Does this get me to my next goal?” If it doesn’t, it’s a hard pass — simple as that. Be honest with yourself and learn the power of ‘no’ because that little word will open up your capacity to so much more valuable opportunities if you use it well.
Not valuing your team
At the end of the day, it’s not just about you but the team around you. Even if you don’t have employees, you likely have a virtual assistant, publicist, intern, or whoever — anyone who is there to support you in your business is invaluable. You need to be putting in the time to show them how much they’re appreciated, whether that’s a day off for their birthday or an invitation to tag along to a conference. You see, your team is the one picking up the slack where you can’t; it’s essential to show them how important they are to the business and that you truly care about their happiness.
This goes for vendor relationships, too. They may not be fully on your “team,” but you work alongside them enough that you should be spending time developing and nurturing those relationships. Your creative partners are in a great place to send business your way (and vice versa), so think twice before skipping your next networking event or unfollowing someone on social media.
There is also something to be said about trusting yourself when it comes to determining if someone is a right fit for your team; as Nora Sheils, owner of Rock Paper Coin shares here, “First and foremost, if a prospective employee (or client) doesn't feel right, trust your gut! Work hard to surround yourself with a team that shares your values, work ethic and goals for the company. Make them feel valued and give them autonomy and will come back to you two-fold.”
Putting your wellbeing on the backburner
Being in hospitality is difficult, just like being an entrepreneur. We work a million hours each week, sacrifice personal time to meet deadlines, and often burn the candle on both ends. Before you know it, you’re burnt out and left with no motivation to do any work. When you skip the self-care routine in favor of working more hours, you lose sight of who you are as a person. Burnout is dangerous and, left unchecked, can actually be the demise of a successful business.
Give yourself a break and find a way to fill your proverbial cup, whatever that may mean for you. It could mean a morning run, an afternoon off to see a movie, or a monthly date with a masseuse. Successful entrepreneurs are the ones who build in time for themselves, so get onboard and start making appointments with yourself.
No matter where you currently stand in business, I encourage you to start thinking about where you see yourself in one, two, five, and 10 years. What has to happen in order for you to get there? What are your benchmarks? Set your realistic goals and really break them down into actionable strategies. Failure is scary, there’s no denying that. But failure doesn’t have to mean giving up — it can also be an excuse to try something new.
As Thomas Edison said, “I have not failed, I have just found 10,000 ways that don’t work.” Nobody gets it perfect 100 percent of the time. We all make mistakes and, hopefully, we’re all learning from those mistakes. Let’s stop looking at failure as an end and start considering it as a push in the right direction.