is “grand opening” signs up and …well…that’s when the fun began…

I told an associate of mine at the time that the business would fail within a year. I was wrong. It took 90 days. This guy had NO traffic at his store. I am not sure of the actual numbers but an intelligent guess is he dropped in excess of $100,000.00 on the project. 90 days later, he shut it down because the furniture wasn’t selling. The furniture was “okay”, that wasn’t the problem. H

Having been a business consultant for over 20 years I have seen (what appears to be) every business idea, under-funded startup operation (including some of my own) under the sun. And probably 80 percent of them failed. Basically, the reasons are always the same… an overestimation of the market and sales and underestimation of costs. The other primary reason for failure is that people simply lack business knowledge to make good decisions. They spend an inordinate amount of time reinventing wheels from the spokes up, most of it based on guesswork and wishful thinking. They simply did not have the proper foundation of knowledge to handle the workloads required of starting the business and they crumbled under the onslaught of information requirements to effectively handle business startup, management, marketing, sales, implementation of technology, accounting, law, human resources, taxes, etc. Simply put, this is too much information for an inexperienced person to digest on one hand while keeping all the plates of daily business operations spinning with the other hand. People get so many plates spinning in the air at one time that they lose control. And the plates come crashing to the ground one at a time…until it fails completely.

I have seen people trash lifetime savings on a “guaranteed idea”. One story I like to tell my clients is about a “wicker furniture” business startup that I was aware of in Toledo, Ohio (I was not engaged as their consultant). This particular individual spent money on a one year lease in a popular strip shopping center, renovated the facility, implemented computer technology to handle the point of sale process to automatically update his accounting, inventory, new phone systems, etc. He bought about $30,000.00 in wicker furniture, spent money on a marquee (another few thousand dollars) as well as fancy furniture for the office. He was the master. The master at buying things. One-thing entrepreneurs tend to be good at it is knowing all the things they need to buy for their new business. He hung his “grand opening” signs up and …well…that’s when the fun began…

I told an associate of mine at the time that the business would fail within a year. I was wrong. It took 90 days. This guy had NO traffic at his store. I am not sure of the actual numbers but an intelligent guess is he dropped in excess of $100,000.00 on the project. 90 days later, he shut it down because the furniture wasn’t selling. The furniture was “okay”, that wasn’t the problem. He

up, most of it based on guesswork and wishful thinking. They simply did not have the proper foundation of knowledge to handle the workloads required of starting the business and they crumbled under the onslaught of information requirements to effectively handle business startup, management, marketing, sales, implementation of technology, accounting, law, human resources, taxes, etc. Simply put, this is too much information for an inexperienced person to digest on one hand while keeping all the plates of daily business operations spinning with the other hand. People get so many plates spinning in the air at one time that they lose control. And the plates come crashing to the ground one at a time…until it fails completely.

I have seen people trash lifetime savings on a “guaranteed idea”. One story I like to tell my clients is about a “wicker furniture” business startup that I was aware of in Toledo, Ohio (I was not engaged as their consultant). This particular individual spent money on a one year lease in a popular strip shopping center, renovated the facility, implemented computer technology to handle the point of sale process to automatically update his accounting, inventory, new phone systems, etc. He bought about $30,000.00 in wicker furniture, spent money on a marquee (another few thousand dollars) as well as fancy furniture for the office. He was the master. The master at buying things. One-thing entrepreneurs tend to be good at it is knowing all the things they need to buy for their new business. He hung his “grand opening” signs up and …well…that’s when the fun began…

I told an associate of mine at the time that the business would fail within a year. I was wrong. It took 90 days. This guy had NO traffic at his store. I am not sure of the actual numbers but an intelligent guess is he dropped in excess of $100,000.00 on the project. 90 days later, he shut it down because the furniture wasn’t selling. The furniture was “okay”, that wasn’t the problem. H

erations spinning with the other hand. People get so many plates spinning in the air at one time that they lose control. And the plates come crashing to the ground one at a time…until it fails completely.

I have seen people trash lifetime savings on a “guaranteed idea”. One story I like to tell my clients is about a “wicker furniture” business startup that I was aware of in Toledo, Ohio (I was not engaged as their consultant). This particular individual spent money on a one year lease in a popular strip shopping center, renovated the facility, implemented computer technology to handle the point of sale process to automatically update his accounting, inventory, new phone systems, etc. He bought about $30,000.00 in wicker furniture, spent money on a marquee (another few thousand dollars) as well as fancy furniture for the office. He was the master. The master at buying things. One-thing entrepreneurs tend to be good at it is knowing all the things they need to buy for their new business. He hung his “grand opening” signs up and …well…that’s when the fun began…

I told an associate of mine at the time that the business would fail within a year. I was wrong. It took 90 days. This guy had NO traffic at his store. I am not sure of the actual numbers but an intelligent guess is he dropped in excess of $100,000.00 on the project. 90 days later, he shut it down because the furniture wasn’t selling. The furniture was “okay”, that wasn’t the problem. H

se in a popular strip shopping center, renovated the facility, implemented computer technology to handle the point of sale process to automatically update his accounting, inventory, new phone systems, etc. He bought about $30,000.00 in wicker furniture, spent money on a marquee (another few thousand dollars) as well as fancy furniture for the office. He was the master. The master at buying things. One-thing entrepreneurs tend to be good at it is knowing all the things they need to buy for their new business. He hung his “grand opening” signs up and …well…that’s when the fun began…

I told an associate of mine at the time that the business would fail within a year. I was wrong. It took 90 days. This guy had NO traffic at his store. I am not sure of the actual numbers but an intelligent guess is he dropped in excess of $100,000.00 on the project. 90 days later, he shut it down because the furniture wasn’t selling. The furniture was “okay”, that wasn’t the problem. H

is “grand opening” signs up and …well…that’s when the fun began…

I told an associate of mine at the time that the business would fail within a year. I was wrong. It took 90 days. This guy had NO traffic at his store. I am not sure of the actual numbers but an intelligent guess is he dropped in excess of $100,000.00 on the project. 90 days later, he shut it down because the furniture wasn’t selling. The furniture was “okay”, that wasn’t the problem. He ran out of money to advertise in any meaningful way. He over estimated sales based on walk in traffic I suppose. The story is a classic because it represents so well what happens to people all over the country everyday. Savings blown, futures wiped out, marriages laid waste, relationships (and credit ratings) destroyed. All because people “thought” they had a “for sure idea”… a decision made on wishful thinking, hope, fantasy and false illusion. Can you think of ways that $100,000.00 could have been better spent? Perhaps he could have bought some books on business, went to school, maybe visited the local library instead? It is a true story.

I was watching the news the other night and Jim Baker, the ex-Secretary of State under Ronald Regan, was promoting his new book… and in the book he quotes his grandfather’s favorite saying of the 5 P’s of success: Proper Preparation Prevents Poor Performance.

I have been thinking about writing a series of articles discussing the importance of getting practical business information before starting a business, how to write a business plan, how to raise money for a business, how to get free publicity, etc. And hearing these 5 P’s got me to thinking… How many people considering going into business will actually take the time to learn before they spend money on a stupid business investment? How many people are smart enough to understand they don’t understand? To know what they don’t know and be wise enough to know there are some things they don’t know they don’t know? (That was not a typo).

If you are an entrepreneur with limited experience, you may want to keep your eyes on my articles in the coming days. I will be sharing some of the things I have learned over the years and you may be able to pick up a few tidbits of information that will help prevent you from making mistakes…maybe avoiding a few heart aches.

To your success!

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