Hardly does any entrepreneur entertain the thought of failure when starting a business. In reality though, only few start-ups, the world over live past their fifth anniversary, as global statistics show. If your business must succeed, you need to be aware of the little foxes that cause many businesses to fail and how to deal with them.

Of course, it takes courage to start a business, but it takes more than being courageous to carry it through into a successful enterprise.

Many of Uganda’s startups, for example, and like in many other African countries, never celebrate their first birthday either due to self-inflicted problems or unforeseen occurrences.

This is not unique to Uganda but a global problem in which, according to Neil Patel, 90 per cent of startups fail.

Patel, who has written extensively about entrepreneurship and is an entrepreneur himself, argues in an article published by Forbes Magazine that he knows about failure as an entrepreneur. Still, it is through failure that he has built on to get to better things.

“I’ve made mistakes, pretty stupid ones. At the same time, though, I’ve been fortunate enough to succeed a few times, too. Along the way, I’ve been able to understand some of the lesser-known reasons that some startups fail, and more importantly, why a few succeed,” he writes.

Patel’s argument is not unique to any country but presents a dilemma that continues to challenge startups worldwide, particularly in Africa.

Charles Tushabomwe-Kazooba of Mbarara University of Science & Technology, argues that it is difficult to focus on a single factor as the cause of small businesses failures. “In practice, many of these are interrelated.”

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In his study Causes of small business failure in Uganda: A case study from Bushenyi and Mbarara towns”, Kazooba notes that businesses that successfully negotiate the initial startup hurdles have greater chances of future success.

In their arguments, both Patel and Kazooba point to a more significant problem.

But of course, there are essential pointers that should be a reminder for every entrepreneur. Some manifest in the early phase of the business, while others might be quite negligible such that they don’t raise the alarm.

This article shall focus on the most obvious of such causes and advise on what you can do about them:

Product or service choice

In the world of business, you don’t produce what you feel or think is good for the market. Instead, you produce what the market demands.

A survey of failed startups by Fortune indicated that 42 per cent of them identified lack of “market for their product” as the single biggest reason for their failure.

What that means is that they produced for themselves and not the market. Therefore, if you’re going to spend your resources making a product or service, spend it making what the market wants.

Don’t assume that consumers will spend on whatever you put on the market. Do some research, however informal it might be.

Ignoring the obvious

After their company folded, Dijiwan‘s leaders wrote: “A good product idea and a strong technical team are not a guarantee of a sustainable business. One should not ignore the business process and issues of a company.

Dijiwan, which had ten workers, had overlooked vital aspects of the business process and ignored the input of other functions that were out of their principal responsibilities.

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Therefore, as a startup, don’t focus on segmentation of responsibilities. Maintain a holistic view of the entire process as some responsibilities may overlap.

Successful entrepreneurs must understand the concept of working on their business, not in their business. Don’t lose your concentration on small things. Focus on the heart of the company. That is why the entrepreneur must have a heart of a lion to confront the many challenges without losing sight of where they want to take the business.

Failure to recover from shocks

Business shocks know no time, but you need much more than just yourself – a versatile team that will combine multiple skill sets and the right mindset to recover from a surprise.

Take the COVID-19 effects on businesses; reduced or sometimes no revenue coming through the enterprises, and yet most expenditures have remained the same. How do you recover from that? It takes a team to innovate.

The versatility will be handy if, at a particular stage, you realize that you need to change products, take up a new marketing approach, shift industries, rebrand the business, or even tear down a business and start all over again.

At Human Capital International, we realize that majority of the above business challenges, what we call the little foxes, can be solved. And we want you to know how to solve them and not lose your business. It is on that premise that we invite you to Expand 2021, the two-day entrepreneurial leadership webinar, specifically designed for startups.

Register here today and save your business.

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