10 Reasons Why Companies and Products Fail
10 Reasons Why Companies and Products Fail
1) Lack of good ideas. Brainstorming is an absolutely essential part of new ventures. If a company wants to produce one product or service that sells, it must first come up with numerous ideas that have some potential. Most businesspeople and entrepreneurs I know brainstorm a minimum of fifty ideas before narrowing it down to the one on which they will actually work.
2) Production time is too slow. One of the ways businesspeople narrow down ideas is based on the amount of production time it will take to get the product to market. A mentor of mine suggests adding twelve months to any estimate I make in production time for new products and services. I have found his advice to be invaluable. It always takes more time than I think to complete a major project.
3) Production costs are too high. Of course, this issue is a cousin of Slow Production Time. Those twelve unplanned months of salaries, vacation days, holidays, health benefits and sick days can put your company in a significant cash crunch.
4) Voracious competitors. Everyone has seen a National Geographic or Discovery Channel episode about the African Savannah, right? Well, once you start making money, your competitors will close in like vultures on a wildebeest. Alternates to your product will begin to spring up out of nowhere like yellow thatching (google it).
5) The introduction of niche markets and customization. Niche markets and customization are great for consumers. They are also the downfall of many business ideas because of the specific demands of niche markets and the high cost of customization.
6) Government intervention. There are a slew of regulations that cover consumer and environmental safety for new products. Those hurdles must be overcome in a timely fashion for a company to make a return on its investment. Yes, I just put the words "government" and "timely fashion" in the same paragraph.
7) Poor marketing. After sinking time and money into brainstorming, product development, safety controls, and government forms, the company must now market whatever it is they are trying to sell. This is a problem if production costs have soaked up more cash than anticipated. No matter how much you believe in Guerilla Marketing (and believe me I am a fan), you are going to need a fair amount of cash to fuel your growth.
8) Poor product or service design. Some companies don't realize that they have a poor design until they have spent thousands developing and marketing the idea only to find that consumers completely reject it. I can hear the collective "Ouch!" from many formerly frustrated but now highly successful entrepreneurs and executives who have been down this path before.
9) The company didn't listen to consumers. Spending a few thousand dollars on market research is much better than spending tens of thousands or more on a failed product.
Now for the final reason why companies and products fail... Drum roll please... Wait for it... Wait for it...
10) They don't deliver on their promises.
I was tempted to end this article after the words "Wait for it..." and let you figure it out on your own, but that would be cruel.
Here's to your success. Avoid these pitfalls at all costs.
10 Reasons Why Companies and Products Fail - To learn more about this author, visit Bill Tamminga's Website.
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My research shows that this will be one of the most widely read articles I will ever write. For whatever reason, people want to know why businesses fail more than why they succeed. So this is for all the critics (and worriers) out there. Here are Ten Reasons Why Companies and Products Fail. Enjoy!
1) Lack of good ideas. Brainstorming is an absolutely essential part of new ventures. If a company wants to produce one product or service that sells, it must first come up with numerous ideas that have some potential. Most businesspeople and entrepreneurs I know brainstorm a minimum of fifty ideas before narrowing it down to the one on which they will actually work.
2) Production time is too slow. One of the ways businesspeople narrow down ideas is based on the amount of production time it will take to get the product to market. A mentor of mine suggests adding twelve months to any estimate I make in production time for new products and services. I have found his advice to be invaluable. It always takes more time than I think to complete a major project.
3) Production costs are too high. Of course, this issue is a cousin of Slow Production Time. Those twelve unplanned months of salaries, vacation days, holidays, health benefits and sick days can put your company in a significant cash crunch.
4) Voracious competitors. Everyone has seen a National Geographic or Discovery Channel episode about the African Savannah, right? Well, once you start making money, your competitors will close in like vultures on a wildebeest. Alternates to your product will begin to spring up out of nowhere like yellow thatching (google it).
5) The introduction of niche markets and customization. Niche markets and customization are great for consumers. They are also the downfall of many business ideas because of the specific demands of niche markets and the high cost of customization.
6) Government intervention. There are a slew of regulations that cover consumer and environmental safety for new products. Those hurdles must be overcome in a timely fashion for a company to make a return on its investment. Yes, I just put the words "government" and "timely fashion" in the same paragraph.
7) Poor marketing. After sinking time and money into brainstorming, product development, safety controls, and government forms, the company must now market whatever it is they are trying to sell. This is a problem if production costs have soaked up more cash than anticipated. No matter how much you believe in Guerilla Marketing (and believe me I am a fan), you are going to need a fair amount of cash to fuel your growth.
8) Poor product or service design. Some companies don't realize that they have a poor design until they have spent thousands developing and marketing the idea only to find that consumers completely reject it. I can hear the collective "Ouch!" from many formerly frustrated but now highly successful entrepreneurs and executives who have been down this path before.
9) The company didn't listen to consumers. Spending a few thousand dollars on market research is much better than spending tens of thousands or more on a failed product.
Now for the final reason why companies and products fail... Drum roll please... Wait for it... Wait for it...
10) They don't deliver on their promises.
I was tempted to end this article after the words "Wait for it..." and let you figure it out on your own, but that would be cruel.
Here's to your success. Avoid these pitfalls at all costs.
10 Reasons Why Companies and Products Fail - To learn more about this author, visit Bill Tamminga's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
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