“Whether you think you can or whether you think you can’t, you’re right!”
~ Henry Ford
Why do some startups succeed, while others fail?
A key study found that “premature scaling” was the #1 cause of startup failure.
Premature scaling is trying to grow your company too quickly. The following are examples of this:
- Spending too much money on marketing/customer acquisition before you’ve proven that your current product is the right fit for your customers’ needs
- Building “nice to have” features into your product/service before getting it in the hands of customers to get real feedback
- Hiring too many employees before you absolutely need them
- Not adapting your business model to a changing market
Be sure to avoid doing this!
Is Your Business at Risk of Failure?
Most businesses fail — they die a premature death. I hate to be so blunt, but this is the truth. The only thing that varies is just how many businesses fail.
What’s the number one cause of this failure?
Well, according to Dun & Bradstreet, the primary cause is lack of strategic planning.
Entrepreneurs and business owners don’t plan to fail. Rather, they fail to plan (which causes them to fail).
Today’s Question: Which popular snack food was once marketed in flavors including celery and tomato?
Previous Question: Which famous restaurant entrepreneur helped Colonel Sanders bring Kentucky Fried Chicken (KFC) back from the brink of failure?
Answer: Dave Thomas, founder of Wendy’s
Many years ago, KFC was on the brink of failure. Fortunately for KFC’s founder, Harland “Colonel” Sanders, an old friend came to the rescue.
That friend was Dave Thomas, founder of Wendy’s. You see, before founding Wendy’s, Dave Thomas had operated a KFC franchise under Sanders.
Thomas immediately identified the problem: there were an excessive number of items on KFC’s menu at the time, with estimates putting the number of offerings at over a hundred.
Thomas helped Sanders streamline the menu by stripping it back down to just the basic fried chicken and sides that originally brought the Colonel to fame.
This is a great example of the “KISS” (Keep It Simple, Stupid) system of business. Make sure you aren’t complicating things. And while customers want choices, too many choices is often paralyzing.
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