REASONS OF ENTREPRENEURIAL FAILURE

BY: RABIA RASHEED & WAJIHA HAQ

YOU HAVE EVER FAILED…???

FAMOUS FAILURES

DIFFERENCE BETWEEN LOSER AND FAILURE

HAVE YOU EVER FAILED?

YOU MISS 100% OF THE SHOTS YOU DON'T TAKE. WAYNE GRETZKY

The tale of entrepreneurship doesn't always have a happy ending, and raising money isn't always the answer.

REASONS OF FAILURE

No Viable Market What if we launched a business and nobody showed up?

NO VIABLE MARKET

Market Research Talk to Your Customers Identifying Customer Needs

POOR EXECUTION

• Evaluation of Your Skills• Choosing Correct Opportunities• Professional Team & Manager• Discipline is Important

Too Much Leverage Give me a lever long enough and I will bankrupt my company

TOO MUCH LEVERAGE

Delay Making Investments Delay Taking on Fixed Obligations

Undercapitalizing the Business

Lack of Competitive Advantages Never bring a knife to a gunfight!

UNDERCAPITALIZE THE BUSINESS

Don’t Underestimate the Time and Capital to Reach Breakeven

LACK OF COMPETITIVE ADVANTAGE Good Location Proprietary Technology Cost Structure that cannot be

Replicated Create Additional Barriers with

the Passage of Time

Competing Head-to-Head with Industry Leaders Better sharpen those elbows...

COMPETING WITH INDUSTRY LEADERS

Sharpen Your 4Ps’ Strategies

Develop a Professional Team

Picking a Niche That is too Small Don't be a market of one!

PICKING A NICHE THAT IS TOO SMALL

Specialize in Niche Market Niche Should Support Your Business Customers Should Not be Expensive

Breakup of the Founding Team 

Breaking up is hard on you -- and your company.

BREAKUP OF THE FOUNDING TEAM Handle Disagreements Carefully Structure Agreements Treat Every Employee Fairly Respect Everyone’s Point of View

and Interest

Poor Pricing Strategy 

The price is right?

POOR PRICING STRATEGY

Focus on Pricing at Earliest Stages of Business Plan

Pricing Based on Cost Structure Pricing Based on Product’s

Perceived Market Value

Growing too Fast What goes up...

GROWING TOO FAST

Move Progressively Finance Fixed Assets with

Internal Cash Flows Focus on Cash Flow Rather Than

Profitability

HEARD STORIES OF FAILURE TO SHARE…??

SOME OTHERS REPORT…

Loss of revenue Poor business models Management/operational issues Lack of capital Credit/debt issues

Lack of planning Trying to make a hobby into a

business Inexperience in managing a small

business Poor record keeping and financial

controls There is a difference in oppurtunity

and new idea Dependence too much on a single

client

Poor selling techniques Inferior quality customer service