For years there has been a widely quoted, but apparently made-up, reference to a Bloomberg Publication study that said eight out of ten new businesses will fail within their first two years. The real figure may be closer to 50%, but the fact remains that most people who begin the process of starting a business will not see that proposed business thrive.
There are many things that can happen to thwart the best of intentions, and many of these are beyond the control of the entrepreneur. Previous MBA blogs have discussed the additional challenges that women entrepreneurs face, and certainly age, location, and the economy play huge roles. But in my nearly 30 years of working in the field of entrepreneurship, I have noticed five factors that seem to doom a significant portion of the ultimate failures.
- Lack of management and business experience
- Failure to conduct a basic “break-even” analysis
- Lack of customer validation
- Inadequate marketing effort
Each of these five challenges will be the subject for a blog of its own in the future, but let’s start by reviewing each at this time.
What could be better than turning your passion or hobby into a career? This is the dream of many entrepreneurs who relish the idea of expanding something they love, and are good at, into a venture that can earn a living. These creative and skilled people are often referred to as “artisan entrepreneurs,” or “technical founders.” Unfortunately few such people have managed to couple their creative abilities and innovative thinking with business acumen. So they may be wizards at writing code, copywriting, artistry, attention to detail, and adhering to quality standards of work. But they may be virtual strangers to pricing, hiring, legal compliance, accounting practices, sales, and negotiating deals.
GET OUT THE CALCULATOR
Closely related to this lack of business skills, is the failure to understand the complex relationship between cost of production, opportunity cost, pricing strategies, and the effect of competitor pricing. I have met with startups that have not taken the simple step of computing how much it would cost them to make the product or offer the service they are proposing. But a simple calculation could point out to them that their business idea may be mathematically impossible to profit from. A product that costs $10 to produce and is readily available on the market for $9 doesn’t allow for any profit margin, and in this case, even precludes the possibility of breaking even. This is why the process is called “break-even” analysis. Even if they could break even, it may still be impossible to actually make a profit.
BUILD IT AND THEY WILL COME…OR NOT
Just like some entrepreneurs don’t bother to do the math to see if they can break even, many don’t bother to do the research to see if a significant number of people are interested in buying the product or service. “Build it and they will come” was popularized by the 1989 film Field of Dreams, but as a business strategy it is more likely to result in “Field of Nightmares.”
SHOW ME THE MONEY
A common mistake in cash projections is to mistake “sales” with “cash-in-hand.” Many startups imagine that the flow of customers will begin within minutes of opening the business, and that those customers will be immediately throwing cash at the business owners. I have seen many entrepreneurs devote sufficient money to open the business but fail to budget for the period of time during which expenses continue to pile up faster than revenue. Some businesses send an invoice with delivery of the product and then allow thirty days for payment. That alone should indicate that there will be a considerable lag before cash receipts start matching ongoing expenses. And cash flow is a leading killer of new businesses.
ONCE PEOPLE HEAR ABOUT ME…
One of the reasons customers don’t show up on the first day of business is because they don’t know the business exists. Those same entrepreneurs that forgot to budget for ongoing expenses also often forget to budget for the type of extensive (and expensive) marketing campaign that can introduce a wide customer base to a business that didn’t even exist a few weeks ago. Do social media posts ever go viral and result in thousands of people hearing about a new venture? Yes. Does word of mouth ever get crazy and result in standing lines of people trying to spend money? Yes. But both are rare and neither can be relied on as a marketing strategy when the survival of the business depends on it.
Just one of these five weaknesses could seriously harm a business’s chance of success. Make it two or three and the odds are against survival. Unfortunately a surprising number of entrepreneurs manage to incorporate the “five-prong approach” to throwing in the towel. In future blogs we will revisit each of these, and more importantly, discuss how they can be overcome.
Since 2004, Bob Cohen has served as CEO of the Braintree Business Development Center, a non-profit regional entrepreneurship and business incubation program serving Mansfield and much of Northeast Ohio. Most of Bob’s work has been with high-tech, high-growth start-up businesses but he has an extensive background working with a variety of entrepreneurs. He earned a Ph.D. from Ohio University and an M.A. from The Ohio State University. He is a frequent presenter on topics related to business communication, planning, capital, and marketing.
May is the month of growth. The grass is lengthening, the daffodils and tulips are blooming, and the trees are leafing out. Like most of us, I feel greater joy when I see the sun shining, hear the birds singing, and I know that another winter has passed.
Growth can take many forms, in this case, building a career in fitness. For this month’s Mind Body Align blog post, I spoke with Carrie Aquino, founder of Evolve Barre, Yoga, Pilates. Carrie’s story is about transformational growth, both as a woman entrepreneur and as a person.
Carrie started teaching step aerobics at 19.
She pursued multiple fitness certifications in Group Fitness, Pilates, Yoga, Barre, and Broga. My conversation with Carrie was refreshing in that I could hear many of my own experiences and beliefs. Carrie shared, “We came to Lexington to be closer to family, and after instructing a couple times a week, classes quickly filled, driving me to offer more.” When she reached nine classes a week, Carrie committed her full-time effort to building a business and career in fitness.
Carrie saw opportunity to bring a modern studio and quality instruction to the area, and she was candid about her approach, “I was too shy to open my own business right away.” She started by renting space from other fitness facilities, including the back room garage of Peak Fitness, where she taught yoga classes. She then left Peak to teach Barre classes. “I came into the area at the right time because Barre wasn’t here yet. It was good timing, as a small business owner, to get in on something that had not bloomed here.”
Carrie opened Evolve in 2014 when Dr. Douglas Darr, a Bellville chiropractor, wanted a yoga studio in his building. Evolve was originally designed with the female population in mind. “My goal was a clean, professional and welcoming studio with quality instruction. Have you ever heard the phrase, ‘Love what you do and you never have to work a day in your life?’ That’s me!
I don’t see it as work.
I love my job and what it does for others. Sometimes my clients laugh when I say, ‘it will be fun!’ To me, it is fun, I love every minute of the classes I teach, and I think that’s what helps to keep people motivated- an upbeat, fun atmosphere. That’s where I would want to work out.” After two years teaching in the area, the ground work was in place. Her vision and hard work met with success.
It wasn’t long before she outgrew the capacity of the Bellville location. A client offered to partner with her on a second location, and after a lot of contemplation and planning, Carrie transcended her initial fears. “I looked at all aspects,” she said. The addition of a partner was essential according to Carrie, and she added Alison Turnbaugh.“Alison has been a great addition in helping Evolve grow. I couldn’t have done it alone.” In October of 2015, she and Alison opened a second location.
One challenge was the addition of instructors to support the growth. She decided to hire people she knew very well. In fact, most of her instructors were clients first. “I watched them for a very long time before I asked them to be a part of the team. It’s very important to know the people that are going to be working closely with you.”
Another evolution of the business was adding yoga for men.
“I am the first officially certified Broga® Yoga instructor in this area and it has quickly become one of my favorite classes to teach. The guys have an easy going, laid back attitude that really creates an awesome vibe.”
To extend her reach, Carrie examined the possibility of offering a yearly membership. She decided to partner with local corporations, who will reimburse their employees for all or part of the annual fee. She also set out to build the market for her business. Carrie and her instructors joined a local Yoga Teachers Meetup Group. “The fitness industry can be very competitive. I would like to see how we can help one another. Even though we may offer the same thing, it’s not the same class. Let’s all work together.”
Carrie spoke candidly about some of her personal growth during the journey.
“I learned to stand up for myself. I learned how I want to treat people. And I ask myself, how do I want my team to feel? How can we all strengthen each other?”
Evolve Barre Yoga Pilates has two locations. Visit Carrie and her team at her Main Street location in Bellville, and in Mansfield at 1336 West 4th Street, next to North Central Golf.
Carrie A. Aquino is the Founder and Co-Owner of EVOLVE. She is Certified-bootybarre® and SCULPT®~Broga®Yoga, NETA Yoga Specialty Certification ~PiYo Live.
With over 14 years of instructing, a combination of yoga, pilates, BootyBarre and PiYo LIVE, she knows what it takes to keep you motivated and stick with it! Her workouts are fun, energetic and really work every muscle you want to tone!! Not to mention, its pretty addicting!! Her specialty is BootyBarre®! This class offers a flawless format, that is executed with precise, professional and easy to follow instruction making it accessible for all fitness levels. Combining light weights, resistance bands, balls and cardio, you will burn up to 600 calories in 60 minutes!!! Mixing up every class keeps you intrigued, yet using the same key words helps you learn the moves to be able to glide right through and guarantee you are working the right muscles safely!!!
She also loves sharing her passion with other like-minded instructors and training them to offer the best and most personable fitness classes around~Giving our clients a dependable, professional, and reputable staff to keep them motivated. After spending 8 years in the Columbus area, she is very excited to offer Bellville and Mansfield a fun and modern fitness option that gets results!
Annamarie Fernyak, A certified Life & Mindfulness Coach and founder of Mind Body Align; a place which nourishes well-being, growth, and belonging through education, collaboration, and environment.
The “art of the pause” has been on my mind, as I was recently a participant at a Cindy Biggs retreat (SeeBigg.com). The retreat entitled CONFIDENCE, COMMUNICATION AND CREATIVITY Women’s Leadership Retreat was held at Mohican State Park.
I attended this retreat in order to bond with three amazing women. My intention being, to get to know them at a deeper level; to build a stronger relationship than is possible across the board room table or in our local coffee shop. What I walked away with however, was the sense of being more comfortable in my own skin.
What does, “to be more comfortable in my own skin” mean?
The Art of the Pause…
Consider taking a moment to take a few deep breaths. In…and Out…extend the exhale as long as it’s comfortable for you. Ask yourself, what does it mean to be comfortable in my skin? And simply note the physical sensations that arise. You can journal any ah-ha’s or words that arise in your awareness.
The day and a half retreat focused on confidence, communication, and creativity, and it was the creativity piece of this retreat, led by Lauren Rader, which moved the entire learning aspect from a mental dialogue about confidence and communication, to experiential learning.
“Art washes from the soul the dust of everyday life.”
The retreat, for me, was timely. If your reading this post, most likely you know about my new business, Mind Body Align, and the vision I have for women in our community.
Starting this business has thrust me out of my comfort zone and into the public eye, triggering all of my “not good enough”, “not smart enough”, and “who are you to…” gremlin thoughts. Starting and building a business with these gremlin thoughts as consultants can be crippling and would, over time, have a devastating effect on me and the business.
So, what do I do about the Gremlins?
Interestingly enough, the focus for much of the creative part of the retreat was confidence. The act of using pastel pencils to draw the sensation of no-confidence and then inversely, the “knowing” sensation that accompanies confidence, shifted something inside me. The image shown above is how I visualize myself in the state of being not good enough.
I teach and practice a form of meditation called Yoga Nidra and Mindfulness. These practices are great for noticing and “being present” to the thoughts, emotions, and sensations as they arise, and for accepting rather than resisting the thoughts and emotions.
Take a moment to bring your attention to your body. What physical sensations do you notice? You can start at your feet by noticing the felt sensation of your feet on the floor. Then move up your body and include your heart and your breath. Are there any thoughts or emotions present? If it feels right, journal what you notice.
You may have heard the quote, “What you resist, persists”; mindfulness practice, and the practice of Yoga Nidra supports attention to, and acknowledgment of, all of the thoughts and emotions that are moving through your awareness.
In some ways, I feel this retreat experience has closed a circle for me. My drawing of the image of the Gremlin, “Just Not Good Enough”, simply poured out of me onto the paper.
When the image was complete, I felt a deep sense of relief; something akin to opening the closet to reveal the “monster.”
Drawing the image; giving the experience shape, form, color, and texture (possibly even a face), on the heels of my practices with Mindfulness and Yoga Nidra; attending to the thoughts, emotions, and physical sensations of an experience, felt like finally slaying the demon. I left that retreat center Friday afternoon after having opened the closet door and illuminating all of its dark recesses.
Take a moment to pull out some markers or colored pencils and draw. Draw anything that you might feel at the moment. There is no judgment here…and no one will see the result, in fact, I challenge you to keep it as your very own secret…like a journal entry.
In conclusion, I want to thank the amazing leaders of the retreat: Cindy Biggs, Lauren Rader, and Ethel de Jesus Tabora.
Thank you for giving me another powerful tool to support my voracious appetitive for personal growth and learning. I can honestly say I am a better, more enlightened, person today because of the gift you generously give through your work. Namaste’ my friends, I look forward to working with you again in the future!
Annamarie Fernyak, A certified Life & Mindfulness Coach and founder of Mind Body Align; a place which nourishes well-being, growth, and belonging through education, collaboration, and environment.
Some of the biggest risk takers I’ve known weren’t sky divers, or extreme sports enthusiasts, but rather entrepreneurs. One client in particular was both an avid mountain climber and sky diver and he would probably agree that his biggest risk was his business endeavor.
That doesn’t mean you shouldn’t take certain calculated risks, especially if you have a nagging passion or vision to fulfill. In fact, risk should not stand in your way, as time is the only thing not on our side. I think author Marie Beyon Ray said it beautifully when she said:
“Begin doing what you want to do now. We are not living in eternity. We have only this moment, sparkling like a star in our hand – and melting like a snowflake.”
Entrepreneurs to me are some of the hardest working and inspirational people you will come across
And, most came to success only after failing several times first. Female entrepreneurs are even more inspiring to me as they have had to push a little harder than their male counterparts to get that success most of the time.
Most males would not necessarily agree or understand that sentiment, and this isn’t about bashing men, but rather celebrating women entrepreneurs and their many successes. The “glass ceiling” still exists in my opinion, but women are busting through that glass with even more shattering force than ever before!
A woman entrepreneur needed her dad to co-sign
I was reminded of this recently as I sat at a table of women entrepreneurs. We were on the topic of financing small businesses and one woman told the story of how, when her business was formed in the early 1980’s they needed her Dad to co-sign for the business loan. At that time women were less able to obtain financing.
Women were not even allowed to apply for credit until after 1974 when the Equal Credit Opportunity Act passed.
Now we have come a long way since that time, but that doesn’t mean the struggles are over.
I made a dream become reality
Over a year ago, I had a vision of celebrating and showcasing the successes of women entrepreneurs. I have been working with entrepreneurs for over twelve years in eight counties and had noticed a lot of the business owners were women. I wanted to provide them an avenue to network with each other and showcase all of the great skills, products, and services that they had to offer.
I knew I would not be able to pull this off successfully on my own, so I pulled together a planning committee comprised of Jodie Perry and Kathy Fox of the Richland Area Chamber of Commerce, Shanna Stapleton; owner of Prospering Life Events, and Tracy Bond; Intern Coordinator for OSU/NCSC. Through the next several months we met and planned the “Women’s Business Showcase.”
We were overcome with excitement
On October 14th, the Women’s Business Showcase Inaugural event launched at the Renaissance in downtown Mansfield. I, along with my planning committee were overcome with excitement and pure joy as we saw all of our hard work and collaborations come together that day.
I was very humbled to see that same joy and excitement in the women entrepreneurs who attended to showcase what they work tirelessly for every day. The day started with set-up, breakfast with networking, and an inspiring presentation by Tracy Graziani and Donna Payne of Buzz Vantage. Mansfield Mayor Timothy Theaker came at the start of the public open house at 11am to help cut the ribbon and give an uplifting speech.
Many people came through to see the showcases from 11am-1pm and offer their support of these women-owned businesses. The mixture of businesses being showcased were diverse and their showcases were creative and inspiring. I am already looking forward to planning next year’s Women’s Business Showcase, and possibly other networking opportunities for women entrepreneurs.
Collaboration is more than a buzz-word
One key take-away I have been focusing on this year is “collaboration.” Yes, maybe this an over-utilized buzz-word these days, but I think it’s an important one, as we should all not work in our own little silos; “we are all in this together,” or at least we should treat each other as such.
We should all reach out to each other to empower one another, and help each other succeed. I know for myself, I could not have pulled off this event without the great planning committee team and the women entrepreneurs who participated.
Just imagine what we could accomplish for the entrepreneurial environment if we all collaborated and empowered each other more. And by doing so, our communities would be an even greater place to live and grow in too.
Michalina Lacy is the Director of the Small Business Development Center at North Central State College, and has spent 13 years working for the SBDC. In that span of time she has worked with many small business owners and entrepreneurs, in all industries and in all stages of their growth.
Michalina comes with an entrepreneurial background, having had a Mom who owned an import retail store, and having owned her own lawn care company in the past. She obtained an Associate degree in Business Management from North Central State College, obtained her Bachelor of Science in Business Management from Ashland University, and holds a Certified Business Adviser graduate certificate from the University of Toledo. Michalina provides free, confidential, consulting services in the areas of: business planning, strategic planning, marketing analysis/planning, financial analysis/planning, access to capital planning, human resources/employer requirements, research, and regulatory compliance, just to name a few.
In March of 2013 Facebook COO Sheryl Sandburg’s much anticipated book, Lean In, hit bookstore shelves. I’d followed the buzz and clamored to the bookstore to get my copy right away. I was hoping that this highly successful woman would have the insight I needed, but alas I was underwhelmed. In the end I forged my own path and I decided to Lean Out.
Our workplaces are broken
Sandburg did quote statistics most women already know about the inequities in the workplace, and struggles that women face. She did share some of her own personal challenges with candor. I can’t disagree with any of the problems she presented, but I certainly noticed some glaring omissions.
I’ve lived a ton of clichés. I’ve worked the same job as men for significantly less pay (I made 1/3 to be exact). I’ve had bosses hit on me, or even worse try to force me to date their friends (isn’t that tantamount to prostitution?) I once found out that a young man, with no education or experience, who was an assistant manager reporting to me, was in fact being paid MORE than me. And then there was the time my employer tried to deny my maternity leave and when I “Leaned In” and stood up for myself they started building a case to fire me. I could go on, but suffice it to say, I know this is a man’s world.
However you look at it, my own career simply hadn’t gone the way I’d hoped it would. In fits and starts I’d poured myself, my WHOLE self into job after job, and over and over I’d hit walls, glass ceilings, or dead ends. No matter how hard I worked, how much I cared, how desperately I chased achievement and produced remarkable results, in the end I was depleted, unappreciated, and often looking for another job.
The mentor myth
Where Sandburg really went off the rails was in a chapter titled, Are you my mentor? Once you weed through the litany of humble brags and whatnot you find that successful women like Sandburg don’t want to be bothered with peons asking for mentorship. Her advice is to just plug away and work hard, somehow your mentor will just magically show up, after all, that’s what happened for her. It’s good to be Sheryl.
Funny thing is, that’s exactly what I’d been doing my whole life and my mentor had never come. Was something wrong with me? Of course not, ask ANY woman and they’ll tell you that mentors don’t fall out of the sky.
So what do we do?
Sandburg talks a lot about “Leaning In.” The idea feels a lot like victim-blaming, but basically she suggests women stand up for themselves, be assertive, and advocate on their own behalf. That’s nice, but I didn’t need a book to tell me that, I’d been standing up for myself for quite some time and it hadn’t really panned out in the ways Sandburg seemed to think it should.
In my experience “Leaning In” was a sure-fire way to find myself out of a job. My elusive mentor probably wasn’t going to show up any time soon, and I was at an all-time low.
Then I got a message from an acquaintance (who later became a friend and mentor.) “Maybe it’s time you start something of your own?” she said; and so I did.
Around the same time another book was published. David and Goliath, by Malcolm Gladwell, and it was just the inspiration I needed. In this book Gladwell makes the case that meaningful social change seldom happens from within, rather, the misfits, underdogs, and marginalized make the greatest impact from without, when they can play by different rules.
This became my formula. If the system is broken, why am I trying to be a part of it? Why try to fit where I obviously don’t? Why should I keep setting myself up to fail?
I decided to Lean Out, and for me that took the form of entrepreneurship. I started my own business, and did it my way, on my terms. That means people first, the profits will follow, and above all else, building everything I do on a foundation of loving-kindness.
You know what? I’ve never been happier.
One of the first things I did when I founded Tog Loft was write a manifesto. This was serious business for me, because it is the foundation of everything that I do. I’ve always lived and worked with purpose, but often found myself at cross-purposes with the organizations of my employ. Never again is my life and work out of alignment with my values, and for me that is a beautiful thing.
The Tog Loft Manifesto
every living thing deserves to be treated with dignity and respect
We want to live in a world where
cooperation and sustainability is our way of life
What we know for sure is
entrepreneurship and the arts are powerful catalysts for change
Your voice matters
You bring something wonderful into this world by being you
Tog Loft is developing space
Developing photographers, community, and entrepreneurship
Tracy loves people, small businesses, and the local movement. She’s passionate about seeing other people succeed, which is why she splits her time between her marketing agency, Graziani Multimedia, and her startup, Tog Loft. She’s also a mom, wife, daughter, friend, artist, writer, and doer of impossible things. She believes in infinite possibility, so look out, she’s dangerous.