Starting and running a small business is no easy feat, and the statistics can be daunting. According to the Bureau of Labor Statistics, 20% of new businesses fail within two years, 45% within the first five years, and 65% within the first ten years. However, Mark Cuban, a renowned entrepreneur and investor, believes that many of these failures can be avoided with the right approach. Here are the top four reasons most small businesses fail, according to Cuban, and how you can overcome them.
1. Master Sales Skills
“No business has ever succeeded without sales,” Cuban asserts. Sales skills are crucial for landing customers, securing financing, attracting investors, and establishing distribution deals. Cuban advises aspiring entrepreneurs to gain experience in sales, even if it means taking a part-time job. This experience will build confidence and communication skills, which are invaluable in convincing others of the benefits of your business ideas.
2. Be Thoroughly Prepared
Cuban emphasizes the importance of being well-prepared before starting a business. This includes understanding your industry, competition, products, profitability, customer base, and demographics. Financial preparation is equally important. Cuban advises against quitting your full-time job prematurely, as financial stability allows you to make better business decisions without the pressure of immediate financial needs.
3. Put in Unwavering Effort
Success in business requires hard work and dedication. Cuban believes that effort is the great equalizer, allowing you to outwork and outlearn your competitors. Regardless of your background, education, or connections, a strong work ethic can be your competitive advantage. Consistent effort not only keeps your business afloat but also positions you ahead of the competition.
4. Commit to Continuous Learning
“You gotta be smart,” Cuban says. He stresses the importance of continuous learning and curiosity. Reading and expanding your knowledge are crucial for staying ahead in business. Cuban recommends books on artificial intelligence and other emerging technologies to keep your mind sharp and your business innovative. His commitment to education is evident in his AI Bootcamps Program, which provides free AI education to high school students in low-income communities.
By focusing on these four areas—sales, preparation, effort, and continuous learning—you can significantly increase your chances of small business success. Mark Cuban’s insights offer a valuable roadmap for entrepreneurs looking to navigate the challenging landscape of small business ownership.
