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[NOTE: This post is part of a series on Entrepreneurship 101 to give a kick-start to those who are thinking about starting their own business. Our regular Job-Seeking and Career-Improvement programming will continue soon!]

In addition to being involved in a number of small businesses, I’ve also talked with quite a few small businesspeople that have called it quits.

My first assumption for these people were that they just weren’t making the money they needed to in order to survive until business really took off. And that was the case for some of these people, though the reasons for that were not what I expected.

However, I’ve also talked with people who left their business for other reasons. For example, one guy I know complained to me about having to go to his PO box every other day to pick up checks people had sent in, drop them at the bank, process the orders, and then go all the way to the post office to send them out.

You see, if he waited more than one day, his PO box would be too full of checks and the post office people would complain to him. Obviously, this wasn’t a “not enough business” situation.

So, let’s talk a little bit about why most small businesses fail and make sure that your business doesn’t fall into these traps.

A SEVERE CASE OF ADD

I’m not sure why, but every person I meet that goes into business for themselves seems to have Attention Deficit Disorder.

Let me be clear. Most of them haven’t been diagnosed with ADD, but that’s just because they think of 18 other things that have to be done on the way to the doctor. Or they see something shiny and get distracted.

But most of them admit to a good number of the symptoms of ADD. I know that I’m in that category, too.

Even if we don’t officially have ADD, the symptoms seem to be what makes a good Small Businessperson. Always on the go. Always thinking. Never able to sit still (so something is always getting done). It also explains why we don’t fit in corporate America.

In fact, I know one guy who was both diagnosed and received drugs for his ADD. He said that he had a newfound ability to concentrate and hone in on one thing like never before. However, given that there were 10 things that needed his attention at any given time, he went off the meds so that he could deal with the other 9.

But, it turns out that ADD, as your greatest strength, could also be your greatest weakness.


TOP 6 REASONS FOR SMALL BUSINESS FAILURE

Of all of the reasons for small business failure, it seems that ADD is responsible for the top 3 reasons. But, judge for yourself:

• The World Is Turning Too Slowly - The business, once it gets off the ground, becomes routine. Things aren’t happening fast enough. And so, boredom sets in. That either causes the typical small businessperson to push things along faster than he ought to or to start new lines of service, etc. that takes the focus off of the main, profitable, boring business.
• Fingers In Too Many Pies - Also a possible result of the above, this is when the small businessperson has too many ventures going at once. Like the plate spinner at the carnival, when more and more plates need to be kept spinning, some will eventually fall and break. There just isn’t enough “you” to go around.
• Crispy Critters - As mentioned in the “Do You Have a Good Reason” post in this series, Small Businesspeople work a lot more hours than most people realize. This unexpected side-effect has a tendency to burn out the unprepared. Especially if you’re a severe ADDer and the remaining “stuff to do” haunts you so much that you can’t sleep. The business doesn’t fail so much as people drop from exhaustion.
• Failure To Launch - Particularly in the beginning, there are a lot of bills chasing not so much money. A lack of enough funds set aside or any of a thousand minor catastrophes can throw off the business off kilter financially before it gets really going.
• “Bad-As-My-Boss” Syndrome - Disappointingly, it sometimes turns out that we are as bad a manager of a business as our former bosses. On a Small Business scale, this usually means the death of the business. On the other hand, it’s usually much easier to live with a bad boss after you discover this about yourself…
• Too Much Hippy - I’ve heard a lot of people saying, “I couldn’t work at home. There’s not enough people around. And too many distractions!” By which, they usually mean that they are unable to stay on task without someone cracking a whip nearby. The same is true for small business. If you’ve got a little too much “Hippy” in you, you’re not going to have the discipline to do what needs to be done.

So, there you have it. Be sure that these things are in line before you get started and your chances of success will soar!


Next In The Entrepreneurship 101 Series: The Biggest Problems With Small Business Success


Enjoy the Search!

-Dan


Photo by: chelseagirl

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This entry was posted on Thursday, February 15th, 2007 at 9:11 am and is filed under Entrepreneurship 101. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.