- 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.
- 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.
- 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.
- 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).
- 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.
- 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.
- 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.
- 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.
- 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.
Bill Tamminga is an SEO expert and website designer in Denver, CO. He is the founder of TM&C, a web design and SEO / SEM company that specializes in helping service businesses in Denver establish and grow their client base using action-oriented WordPress websites and unsurpassed search engine optimization. To date every TM&C client has at least one listing on the front page of Google. http://www.billtamminga.com