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Reasons Why Businesses Fail

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According to Bloomberg, 8 out of 10 business fail within the first 18 months of their inception and the sad reality is, almost all the businesses fail because of the entrepreneurs who handle it.  While there are a multitude of conditions which could lead to a business failure, most startups which fail, make similar mistakes.  Here is a list of the top 5 reasons why businesses fail.

 

1) Starting a business for the wrong reasons

Most people start a business with a desire to earn a lot of money.  While this is a benefit successful entrepreneurs achieve after years of hard work, starting a business for money is not the right entrepreneurial mindset.  The driving force for your business should be your passion, not your desire for money. Entrepreneurship requires a lot of dedication, hard work and patience and if you lack passion, you will most likely lose interest in a few years and eventually end up failing.

 

2) Lack of proper planning

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Planning is an important part of running a business.  If you do not work according to a proper plan, your business is most likely to fail.  A good plan consists of definite short term and long term goals and will also define where your company will be in the next few years.  Lack of such proper planning will cause irreparable damage to your business.

 

3) Lack of funds

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The most common reason why startups fail is the lack of proper funds.  Budding business owners often do not understand money management and are likely to underestimate the amount of money they require to start a business and might even have unrealistic expectations about profits. As a result, the money spent on the business becomes more than the money earned by the business.  This leads to debt and when this debt becomes too much, they are forced to shut it down.

 

4) Lack of value

The heart of any business is the value it creates. The higher your value, the more will be your customer base and the more you will earn.  Your product or service should be more valuable than your competitors’. In other words, your business should be able to offer something new.  If your business lacks value, it is bound to fail.

 

5)  Early expansions

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It is rightly said that slow and steady wins the race.  New entrepreneurs are often in a hurry to expand their business to other markets and this is the leading cause for bankruptcy.  Expanding a business is good, but before you enter new markets, make sure you maximise your existing market. If not, you will most likely be forced to close your business due to bankruptcy.

 

As they say, failures are stepping stones to success and as a business owner, the success of a business mostly lies in your hand. If you ever failed trying to run a business, learn from your mistakes and start over again. Most of the billionaires today are people who once failed.

 

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5 Essential Skills Required To Be A Successful Entrepreneur

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All the high net worth individuals in the world are where they are because they developed a certain skill set, which in turn helped them to reach their goals.  Mere knowledge of your niche area won’t help you become a successful entrepreneur. While you need patience to run a business, you also need to focus on developing some critical skills which not only help you run your business but also can help you solve any problems that might arise in your entrepreneurial journey.

Here is a list of 5 skills you should start developing if you aspire to become a successful entrepreneur.

 

1) Creativity

As an entrepreneur, you will face new problems every day and for entrepreneurs, creativity isn’t just about coming up with new ideas, it is about being able to adapt to new situations quickly and finding solutions for problems as and when they arise. You will also have to constantly improve and upgrade your products and services to stay alive in the market. Therefore, creativity is the most essential skill an entrepreneur should possess.  

The brand Apple is synonymous with creativity, thanks to the genius Steve Jobs. When the iPhone initially launched, critics came up with a 100 reasons as to why it would fail and it almost did. With his creativity, Steve Jobs kept upgrading the product and today, it is the best selling smartphone in the world.  Steve Jobs’ creativity was the driving force behind Apple’s product design and marketing.

 

2) Communication

Every entrepreneur needs to be an effective communicator. It is essential for entrepreneurs to be able to communicate with employees, customers, investors, peers and mentors. One simply cannot manage a great team or  provide a great customer service if one is not an effective communicator. Irrespective of whether a person runs a startup or a Fortune 500 company, communication is the key skill that he must develop.

Billionaire entrepreneur Richard Branson who himself is a student of communication, calls it “an art”.

 

3) Salesmanship

As an entrepreneur you should be able to sell sand in the desert.

Salesmanship is one such skill without which, it is nearly impossible to succeed as an entrepreneur. The soft skill of sales goes hand- in -hand with communication and is key to run a successful business.  An entrepreneur should be able to sell the business idea to investors, their products and services to customers.

Salesmanship plays a key role in building trust between the company and the customer.

Mark Cuban, an American businessman, investor and the owner of National Basketball Association often emphasises that salesmanship is the skill that made him millions. When asked what he would do if he lost it all, he replied saying that he would pick up a sales job and was pretty sure that this could make him a multi-millionaire again.

 

4) Money Management

If you cannot manage money, you cannot manage a business. Period!

Financial management is the most important responsibility of an entrepreneur, especially in the startup stage. Knowing your cash flow can make planning and budgeting for financial needs easier. This is a key skill to develop if you are aiming to be a successful entrepreneur.

Elon Musk, the 46 year old CEO of SpaceX and Tesla often states that he does not spend his $ 20 billion fortune on lavish vacations or expensive hobbies. Instead, he invests his profits back into his business for its development.

 

5)  Ability to find and manage people

Having great people on your team will make life much easier for you. It gives you access to new strengths while building a company culture of which people would want to be a part.  Hiring the right people is key to building a successful company. Along with hiring the right people, an entrepreneur should be able to manage them efficiently. He should be able to assign the right kind of tasks to people considering their strengths and weaknesses.

The world’s richest man, Jeff Bezos follows a three question method of hiring people for his company.  

  1. Will you admire this person?
  2. Will this person raise the average level of effectiveness of the group they’re entering?
  3. Along what dimension might this person be a superstar?

Only when he is satisfied with these answers, will that person work for him.

Being an entrepreneur is a complicated task and your success as an entrepreneur is the result of the small actions taken over a period of time.

If you notice you are lacking a skill or two, focus on nurturing those skills today so you might be able to enjoy success tomorrow.

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Character Traits Of Successful Entrepreneurs

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To succeed as an entrepreneur, an idea and money won’t suffice, you will need a lot more.  Over time, entrepreneurs develop some particular character traits which help them reach where they are.  From lifestyle and discipline to confidence, there are a lot of areas on which you need to work to succeed as an entrepreneur.  Here is a list of some character traits of successful entrepreneurs which you can incorporate into your life.

1) Discipline is one trait without which it is nearly impossible to succeed in any discipline in life, let alone entrepreneurship.  If you observe the work patterns of the world’s richest, you will find they are all extremely disciplined and follow a strict routine.  From waking up before the world does, exercising regularly and eating the right kind of food, to finishing up all the required tasks on time, they are disciplined in every aspect of life.  Discipline is hard to master, but if done, it can take you to new heights in life. An entrepreneur like Elon Musk starts his day as early as 5:00 A.M., and believes in scheduling the most critical tasks for the initial hours of the day.

2) Successful entrepreneurs are extremely passionate about what they do.  They love everything about their product, service or company. Passion is what drives them through the highs and lows of life and helps them stay motivated even in times of trouble.  Passion is the key to successful entrepreneurship.

3) Entrepreneurship in itself is an extremely risky venture and therefore, all successful entrepreneurs are risk takers.  Playing safe does not always lead to any commendable achievements in life or business. However, entrepreneurs do not take just any risks, they take calculated risks.  The most important part of being an entrepreneur is knowing what kind of risks to take and what to avoid. Larry Ellison, the founder of Oracle, takes risks like promising clients non existent products and then goes back to his team and asks them to work on the same.

4) Successful entrepreneurs know where they are is because of a team who helped them all along the way and hence they are team players.  However good you are at your job, you cannot succeed unless you have a team to back you up. Working together as a team towards a goal is the ultimate recipe for a successful business.

5) The world is constantly changing and entrepreneurs know the only way they can succeed in this world is by learning something new everyday.  Successful entrepreneurs spend a lot of time learning, from learning new market trends and new technologies, to upgrading their skills from time to time, entrepreneurs do it all.  To succeed as an entrepreneur, it is extremely important to be a fervent learner. Warren Buffet is an entrepreneur who keeps learning constantly to keep himself updated. In fact, Buffet read all the books about investment at his local library by the age of 11.

 

In this world full of competition, it is not easy to succeed as an entrepreneur.  However, if you are determined to do it, entrepreneurship is the most rewarding job and these are some of the many traits you should develop to succeed.

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Sanskriitii – A Saviour For Indian Artisans?

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Founded by Mr. Anil Tripathi and Ms. Lata Pathak in 2017, Sanskriitii is a startup that deals with arts and crafts and hence works with a vision to empower Indian handicrafts which do not generally get the appreciation they deserve. A team of engineers, management professionals and philosophers have joined hands at Sanskriitii to make hotel decor, corporate gifting and home decor more interesting by incorporating contemporary design into artefacts.

What Sanskriitii does

Sanskriitii brings a whole variety of Indian handicrafts under one roof. These varieties include Dhokra art, Marble Inlay, Stone Jali, fusion product line and many more. Their products are mostly offered to large chains of hotels for the interiors of their rooms and lobbies as well as to restaurants and large corporates for bulk gifting.

“The main challenges faced by craftsmen these days are creating new designs suitable to the present day lifestyle, market demand and financial limitations to pull off bulk orders. Due to these reasons, most of the craftsmen give up on handicrafts and move out of their villages to other nearby towns to find some other random jobs to earn a living for themselves and their families. Sanskriitii plays a vital role in helping craftsmen overcome these challenges. It not only provides craftsmen with capital and raw material, but also builds an ecosystem around them which enables them to deliver the finished products to the customers.” as shared by Ms. Pathak .

Due to the changing lifestyles of the consumers and their lack of appreciation for traditional goods, a startup like Sanskriitii is determined to create its own market space.

Challenges faced by Sanskriitii

“With readymade, easily available and branded products ruling the market, handcrafted products can easily be left behind because their gestation time is comparatively larger and clients generally do not prefer waiting for such long periods to get their products delivered. In addition, the industry as a whole is yet to accept and understand handmade products. Lack of awareness among people about handicrafts is yet another challenge Sanskriitii is trying to overcome.” Mr. Tripathi emphasizes.

Overview

At Sanskriitii, a wide range of handcrafted products are designed and made, which suits the present day lifestyle and yet have a traditional touch. The added advantage with handmade products is, no two products are exactly the same. These products are also eco friendly. Team at Sanskriitii stay focused to their vision of empowering Indian handicrafts and small scale entrepreneurs. Although the delivery time is much longer than that of regular products, these handicrafts are worth the wait.

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