90% of Businesses Fail in Year One – Here’s How to Survive! #155

Hey everybody. Welcome to the Homefront. I am Jeff Duden. And did you know that 20% or greater of all businesses don't even survive their first year? And guess what? It's usually not because the idea was bad, the market was too small, or the owner didn't work hard enough. No, most businesses fail because they make four critical mistakes. Mistakes that choke their growth even before they get off the ground. But here's the good news. If you, if you can avoid these mistakes, you can beat the odds and build something that lasts for you and the people that you care about. So today I'm breaking down the four biggest reasons businesses fail in year one. And more importantly, how to make sure that yours doesn't. I get it. You've got a killer product or service. Oh, it's the best. You believe in it, your mom loves it, your friends tell you you're going to be the next big thing. But here's the reality. Having a great product is just the first step. And it means nothing if nobody knows about it. A lot of first time entrepreneurs fall into the if I build it, they will come trap. But that's BS if you're not selling actively, intentionally and repeatedly, your business is dead in the water before it even sets sail. Sales isn't a dirty word. It's the oxygen of your business. You need a structured process that consistently brings in customers or that great product of yours is just going to sit there collecting dust. And the hard truth, A mediocre product with great sales will be a great product with no sales every time. Number two, marketing can be a black hole. If sales is the oxygen, marketing is the lungs. It's how fresh opportunities come into your business every day and get into your system. And yet, there's too many business owners that make one of these three mistakes. Number one, they blow their entire budget on the wrong strategy. They meet some slick marketing person and they sell them on a one time plan and they throw a Hail Mary and it doesn't work. Number two, they don't market at all and they just hope people will magically find them. That's not going to get you anywhere. Or number three, they copy what their competitors are doing without understanding why. Marketing's not just about throwing money at social media ads and hoping for the best. It's about understanding your customer. Where do they spend their time? Where do they invest their attention? What keeps them up at night? And how does your product solve the problem, their problem, better than anything else? You need a strategy, not just some random collection of unrelated tactics. Because if you don't have a marketing plan that predictably generates leads and quality leads, you're not running a business. You're playing the lottery. And you will never, ever scale a business until you are drowning in leads and you are forced to add salespeople and production capacity. And I don't have to remind you that hope is, is not a strategy. Number three, finance. Let's talk about the money, because this is where most businesses meet their untimely end. Larry Janeski is a great entrepreneur and somebody that I admire and respect, and he wrote a great book called Highest Calling. And one of the biggest mistakes entrepreneurs make is spending money they think they'll have instead of spending the money they actually have. That's hilarious. I get it. You're excited. You want the fancy office, you want the expensive chair, you want a great sign out front, top of the line equipment, maybe an executive that costs more than you should, slick branding, all of that stuff. But in your first year, your focus should be on survival and growth. Not looking successful, but actually blocking and tackling and being successful. Cash flow is king and equity is the kingdom. You've heard me say that, but I will tell you, cash is the real oxygen in your business because you don't know how bad you need it until you're suffocating because you don't have any. And if you run out of money, it's game over. Every dollar you spend should be strategic with a clear return on investment. The best advice? Operate lean. Keep your overhead low. Reinvest in the things that drive revenue, and reinvest in the things that drive revenue, not just the things that make you feel like a big deal. Lastly, the owner's blind spot. Not investing in your development. As a business owner and a business builder. Look, it's a tough pill to swallow. Most first time entrepreneurs aren't business owners. They're some sort of technicians. They start a business because they know how to do the thing or they know how to build the thing, whatever that is. Baking cakes, fixing cars, designing software. But being great at your craft doesn't mean you know how to run a business. You've heard me say that every business has a certain dollar per head. And if you're not a great leader, and if you can't have great conversations, you can't attract people to help you build your business. And you need people, either employees, contractors, other stakeholders, referral partners, all of these people to help you run a business. So you've got to be the person that attracts all those people to you running a Business means understanding the hiring, the managing, tracking the KPIs, setting long term goals, learning how to turn strategy and communicate that to your team and making those strategic decisions stick. It means stepping out of the weeds and learning how to lead. And if you don't do it, you'll stay trapped working in your business instead of on it. And you will always be at risk because if you don't scale, one day it will fail. And that's a fast track to being burned out or worse, a bankruptcy. Now entrepreneurs who make it past year one are the ones who become students of business. They learn, they adapt, they lead instead of just doing the work. So here's the blueprint on how you can avoid becoming another failed business statistic. Number one, Develop a strong selling system. And if you don't know how to sell, for goodness sakes, go to Sandler Sales. There's one in every market in this country. And get yourself some sales training. But don't wait for the customers. Go out and get them and then be ready to convert them to business. Number two, create a real marketing plan. Test, test, test, test. Before you spend, spend, spend, spend. Know your customer, be where they're at and give them a reason to buy you. Number three, watch your pennies, manage your money, operate, lean, reinvest strategically and never spend cash that you don't have. And number four, learn to be a business owner, not just a technician. Take two hours a week and sit back and say if I had to 20x this business, if I had to 10x this business, if I had to do twice as much in half the time. Challenge yourself to solve those problems. Those are the types of problems that are gonna lead you to the right answers to scale your business. That now if you do these things, your business has a real shot not just at surviving year one, but at thriving for years to come. All right, that's a wrap for today. I enjoyed this. I hope you did. But if you found it valuable, share it with somebody who needs to hear it. And as always, keep pushing forward, keep learning and keep building something that lasts for you and those that you care about. If you enjoyed the content, give us a like, give us a subscribe, put a comment in the notes. We'll get right back to you. Thanks for listening. I'm Jeff Duden. I'll see you next time on the home front.