10 Reasons Why Small Businesses Fail Paul Graham tells us
Reasons for the failure of small projects
When Paul Graham was asked, “How do we choose new and small business ideas?”
He replied, “Imagine yourself living in the future, and then build what is missing.”
Paul Graham is considered one of the most distinguished and genius entrepreneurs in this era, due to his many achievements in this field.
Paul Graham is a British programmer, investor, and writer. He primarily worked on the programming language of Lisp, founded his startup Viaweb, and has also made a significant contribution to supporting and financing micro-entrepreneurs in Silicon Valley through the establishment of the Y Combinator project incubator.
Graham has written many articles in the field of business and finance, where he not only focused on how to shift from poverty to wealth, like other writers and bloggers, but also concerned about the causes of failure, whether small projects fail or even how to move from wealth to poverty in order to avoid those the reasons. His experience in the field of investment, specifically investing in the field of small projects, their financing and support, made him a great expert in analyzing projects and the reasons for their success and failure.
In this article, we will learn what Paul Graham wrote about successful projects and how to avoid failure in creating small projects. We have worked to summarize the reasons that can lead to the failure of small projects, according to what Graham presented in his writings.
10 reasons why small businesses fail, brought to us by the genius investor Paul Graham
1- No idea for the project
A project that does not have a clear goal, and does not express in its various aspects the essence of its idea and mission, will never succeed.
In order to avoid failure in the project, you must choose a project that fits with the community’s need and satisfies one of their basic needs. The idea should be distinct and creative as it diverges from other traditional small projects. The project must have a very competitive advantage, whether in terms of the nature of the idea, the nature of the work, etc.
Not having a suitable idea could mean that the entrepreneur will be in a lot of chaos, because it is the idea that gives the project the course of action that it must follow.
2- Not having enough experience
One of the most important reasons for the failure of small projects is the lack of sufficient experience, but the question that is always asked is, how can this experience be obtained?
In fact, according to Graham, the best way to gain experience is to start your own business even if you have that experience. Starting with the project means that you will work in the appropriate work environment, which will provide you with experience, as you will directly experience the problems and obstacles, and you will not be satisfied with the theoretical words that people usually provide.
The sooner you start working on your project, the better results you will achieve. If you are determined to work on your own project, do not think of working for others, or at least you can work as an employee to earn a minimum of money, but you must always work on projects in order to gain the necessary experience. Working on projects does not always mean success from the first time. On the contrary, you must fail to realize what methods are suitable for your project in order to avoid them in subsequent projects.
3- The start of the project at an inappropriate age
You may think that you must wait for a certain age to think about creating your project, and in fact, this idea is incorrect, because projects and success do not know a certain age. At the same time, this does not mean that you start your project at any age, in your belief that projects can succeed at any age.
Projects do not require a certain age, but they do need a minimum of maturity. This maturity in experience, the ability to deal with people or problems, etc.
4- Lack of commitment
Small businesses need a lot of patience before waiting to reap results. We may notice that there are many people who do not show sufficient preparation for patience and commitment, so they are subject to failure.
5- Fear of instability
There are many people who are afraid of the idea of projects because for them it means instability compared to a job or routine work. This fear is considered one of the main reasons for business failure. Projects always need some risk, especially as they will have some ambiguity in their beginnings.
6- Competition is strong
Some might think that the strong competition means that there is no place for their project in the market, and that there are enough companies operating in the same field, which are bigger companies and have a very large market share. But the idea is that you can always occupy a distinguished position in the market despite the presence of a large number of competitors, and that only by finding your way in a distinctive, innovative and creative way with which you can compete with other companies or projects.
The key to overcoming competition is to think outside the box, that is to think creatively, so that you always find solutions that other projects have not covered, or you may find some gaps that those projects could not overcome in order for you to do the job.
7- Lack of sufficient intelligence
Any step in the world of finance and business always needs intelligence before anything, as weakness in experience or even lack of sufficient capital can be overcome only through intelligence. This does not mean that projects will not succeed unless their owners are geniuses who are unparalleled. On the contrary, success belongs to everyone, but it always requires some effort and intelligence that is necessary.
8- Lack of persistence
There are a lot of problems that can face the project, especially in its beginnings, there are many mistakes that are likely to appear or be committed by the employees or even by the project owner himself, there are many competitors who may be able to remove any competitor from the market, there are Problems with financing, problems in marketing, and other obstacles that prevent any project and prevent its success in a simple way.
Therefore, if you are on the verge of establishing your project, one of the advice that Bill Graham gives us is persistence and perseverance on the project, that is, you must possess sufficient patience and show a lot of determination and will necessary to survive and continue and achieve success.
9- Lack of a partner
Some people may think that the lack of a partner is a major obstacle to any project, due to its benefits in terms of financing and investment, and indeed the partner is one of the elements of success of any project. Therefore, try to find the right partner for your project, who is enthusiastic and believes in your idea, and who can also support you in certain aspects of the project.
Don’t just base your choice of partner on interests or enthusiasm, but try to gauge their ability and willingness to support you and your project.
10- Having a steady source of income and unwillingness to take risks
There are many people who prefer to have a steady income from a job or work within a company because it provides them with financial stability, especially if they support a family or are responsible for some things that must be committed to paying their expenses monthly or periodically, and thus constitutes fixed income A source of safety for them.
Or sometimes, fixed income may lead people to feel lazy or unmotivated to start a new project, because they feel that they do not need more money and thus lose their enthusiasm. Or even entrepreneurs may be in the youth stage and want to establish their lives in a stable manner, so they resort to fixed income because it is more comfortable for them than projects that carry a lot of risk.
So far we’ve given you 10 main reasons that Bill Graham believes are the first reasons small businesses fail. If you suffer from any of these causes, you should seriously consider getting rid of it before you judge your project to failure.
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