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Not All Start-ups Can Succeed, or... Even Passion and Hard Work Won't Overcome A Bad Business Concept!

small-business-blogs-Entrepreneur-startups-successfullI can't tell you how many business plans I have read that were built on a business concept that simply could not work. Too often an entrepreneur, full of passion and bent on hard work, ventures out into a business that is either ill-conceived, poorly-timed or not well thought out.

Usually, it's an idea that just logically or theoretically makes sense to the entrepreneur, but has no shot in reality. It might have been that seminal "light bulb moment" when the idea came to entrepreneur. He/she then bounces the idea off of a couple of colleagues, who might also think the idea makes great sense ("great minds think alike" and all that). Then, armed simply with the idea, a sense of purpose and a strong work ethic, the entrepreneur sets off to conquer the world!

He/she might even meticulously create a business plan, complete with detailed financial projections of significant future revenue and profits. And, typically, the fundamental market analysis shows an equally significant market, built on the premise that because it's so logical, how could it not work? Even more typically, as the entrepreneur begins to introduce the concept to prospective customers and meets with courteous, if not tepid response, he/she just sees it as that minority of people who "don't get it." They continue down that wrong path, thinking that eventually hard work and their belief in their idea will win out.

But Master Yoda, didn't you tell us that passion and hard work are necessary for business success? Yes, my young business warriors, but only if the business concept makes sense and can be proven.

Some telltale signs of a problematic business concept. Often, the entrepreneur is a novice in the market(s) they are attempting to enter, feeling they are pioneers (or worse, "smarter" than the market) bringing a new idea to a market in need. Of course, they become more knowledgeable over time, but still remain naive about the nuances of the market. Very typically, they don't seek out learned advice from "gray hairs" already in the business, mostly because they don't know enough about the market to even know who they are. As Disraeli cautions - "they don't know what they don't know!"

And finally, they have difficulty proving the concept in reality. In short, they find "the dogs just won't eat the dog food," or at least, not enough of them, even they give "the dog food" away!

How can this happen?

Most often, the entrepreneur is so totally focused on the business idea and a sense of mission, that he/she never really took the time to answer the most basic questions that make an idea a business - WHAT, WHERE, WHY and HOW!

WHAT describes the fundamental problem to be addressed or the need to be fulfilled by the business' main product or service that is borne of the idea, and how big that problem or need actually is.

WHERE
describes the target market where the problem or need primarily exists.

WHY 
addresses why prospective customers will pay money for the WHAT.

HOW 
describes the steps (strategies, tactics and plans) that will be taken to get customers to buy the WHAT.

In the typical case of a bad business concept, the WHAT and WHY just never gets addressed, but gets painted with the logic and zeal of the entrepreneur, as opposed to solid research and market advice. A detailed business plan doesn't mean it was a well-thought out business concept or a business that can succeed. Just that the entrepreneur did some prolific writing. And more typically, they haven't engaged real market advice, understood real market situations and spoken with real potential customers to see if what they have can really become a scalable business. Mostly their passion and sense of mission has convinced them they are right. Every entrepreneur needs to find knowledgeable folks who will be objective and point out the warts and blemishes that envelop their business concept and their product/service. Every business/product/service has them. To the extent they can't be overcome will be the determining factor for whether the business actually has "legs" to proceed.

And sometimes it just doesn't. I preach passion, but all the passion in the world cannot overcome a poorly thought-out business concept or one where the market just isn't right, whether it be economic conditions (like the last 18+ months) or market conditions (too early or not a big enough problem). Then it may be time to move on to something else. There are countless stories of learning from early failure breeding later success - quitting, then trying again, later. Either with a concept that is better thought out by answering the WHAT, WHERE, WHY and HOW questions, or one where the timing is better.

"The Entrepreneur's Yoda" knows these things. He's been there.. May success be with you!

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