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How Businesses Fail. A Note to Entrepreneurs, Solopreneurs, and Consultants.

My good friend and all-around wonderful gentleman, Steve Woodruff, wrote an excellent piece over at Connection Agent. I commented there, but I couldn’t resist writing a little something here for non-salespeople.

I personally know many people who are very, very competent in their domains. They are true subject matter experts, and they have gained their experience working for great companies where they were able to produce stellar results. At some point, these people with great skills and expertise decide that they are entrepreneurs and hang up their shingle and attempt to go it alone.

And then they fail.

There is one primary reason they fail, and there is a single, simple (yet difficult) solution.

It Isn’t Technical Expertise

Many of the people I know who decide to go it alone and start their own business or consulting firm have plenty of knowledge. They also have the skills necessary to help their clients produce the improvements that they seek. The only problem is that they don’t have clients. This is why they struggle or fail.

Many people who go into business for themselves overlook how difficult it is to acquire clients. They mistakenly believe that their primary task in their new venture will be to utilize their technical expertise and their skills to help others. This isn’t their primary task. Delivering is the task that follows the acquisition of a client.

No client, no delivery necessary.

Businesses are built to acquire and serve clients and customers. Without clients and customers a business fails. Preventing failure requires a entrepreneurs undergo a fundamental mind shift—an embracing of the hard truth that their real role is sales and that their success depends on it.

The Remedy—A Devotion to Client Getting

Entrepreneurs and solopreneurs have to embrace that the remedy to their major business problem requires that they focus their efforts and energies towards client getting. For a business to survive and thrive, the business has to be devoted to acquiring clients.

If you are entrepreneur, you have to dedicate your time, your effort, and your energy to acquiring clients or hire someone who will. If you do it yourself, you are your own Vice President of Sales, Sales Manager, as well as your own sales force. If you hire someone, you are still the Vice President of Sales and Sales Manager; you have to lead and manage that effort.

If you are a solopreneur, you may not be able to afford to hire someone. This means that you are first and foremost your own sales force. The activities of selling have to dominate your agenda until you have enough customers and clients to sustain the business—as well as plan for continued client acquisition.

The amount of time, effort, and energy it takes to acquire clients is far, far greater than most entrepreneurs and solopreneurs imagine. And most of the other business challenges, like cash flow, are solved by client acquisition.

Without clients, businesses fail. Understanding and embracing that you are a sales organization first and foremost, is the key to your business surviving and thriving.

Questions

What factors contribute to a businesses failure? How many of those factors might be mitigated by better client acquisition?

When a small business, entrepreneur, solopreneur, or consultant struggles or fails, is it likely that it was their skills or technical expertise that caused their failure? What is normally the cause?

What is the fundamental reason for a business to exist?

How do you make the mind shift required to become the chief sales person for your business or practice?

 


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Comments

comments

  • http://www.dailytrader.com Wholesale Suppliers

    Customer is everything, without it there is no existence of any business. Acquiring a customer is the fundamental obligation to run a business and different strategies may be acquired to attract people to visit you time and again. A business may be an organization or a solo they both target customers to survive. Every business requires different tactics according to its nature.

  • http://www.dcdesigntechnologies.com Jinan Alrawi

    hi Anthony – yes, Solopreneurs and start ups sometime think that you start and the sales just happen. In my experience, getting a new client/partner takes about 9 months to a 1 year.
    This does not apply if you already have an established product/brand.
    Focusing on this potential client/partner, communicating with them, nurturing them, working out the details of the partnership takes a lot of effort and time.

  • Pingback: Turning the Corner « Connection Agent

  • http://www.salessells.com Wim @ Sales Sells

    Couldn’t agree more Anthony, everyone’s in sales. Makes me think of all those times I see so-called creative people (designers, artists, musicians,…) look down on “the industry” because they just don’t know how to sell and market themselves. It’s one thing to be talented or skilled, it’s another to convince others of your talent. I would even go as far as saying that the top contemporary artists are generally the ones with the greatest sales/marketing minds (or at least their promoters have).

    Thanks a lot for addressing this issue!
    Wim

  • http://adamoneill.net Adam

    I think as salespeople we have to remember we are who keep sthe company going by bringing in revenue. I don’t mean this in an arrogant way, but we need to remember everyone is depending on us. So if we are not giving an honest effort and doing our best to succeed we are not only cheating ourselves, we are hurting those who depend on us for their livelihood.

  • http://twitter.com/mike_trow Mike Trow

    Ian, 

    What is your recommendation for new customer acquisition? How do you prioritize between cold calling, networking and responding to job boards?

    I have been offering contracting and consultancy services for about 6 months, since the start of the year turning the corner is becoming more difficult as many associates of mine appear to be cash strapped or in a planning phase.

    Any advice?

    Thanks in advance,

    Michael