In this video Ed Hess, a professor of Business Administration at Batten Institute, gives a presentation based off of the book he co-authored "So You Want to Start a Business." In this lecture he takes his strategies from the book and compacts them into easier to understand chunks.
You'll hear the most common reasons businesses fail, his 3 "W's" or keys to finding out how to get customers interested, and hear answers to the tough questions. This lecture encompasses the main strategies of Hess's book.
First, Hess speaks on 6 reasons why businesses tend to fail:
- Not A Business Opportunity
- Not Enough Customer Focus
- The Numbers Don't Pan Out
- Problems In Production
- People Problems
- Too Much Cash Flowing Out
Once he establishes these 6 reasons he crushes them; saying that all entrepreneurs can overcome these problems and create a successful business:
- Don't jump on every idea. Look for those that have some sort of possible customer base and opportunity to grow.
- Focus on the customers. They aren't going to love the product just because you do. Convince them they need it.
- Do projection and figure out what the possible numbers are before even trying to start a business.
- Find employees who are hard working, love your business, and keep their personal lives away from the professional environment.
- Budget heavily and try to cut costs so that cash coming in is higher than cash going out.
Hess claims that once an entrepreneur can get past these problems by using his strategies they can become successful. The scary reality is that 5,000,000 new businesses open every single year and nearly 70% of them fail. Hess claims that franchises do a little better, as long as a well established and well known franchise is bought. He continues his lecture speaking on how to get customers and keep them, how to turn an opportunity into a business, and how to choose which opportunity to turn into a business.
The seminar was recorded on December 2, 2008 and was co-sponsored by the Batten Institute at the Darden School of Business at the University of Virginia and the Charlottesville Virginia Chamber of Commerce.