#27: Why do businesses fail? (It's not what you think)

Cashflow crisis.

No market need.

Poor planning and management.

Ignoring customers.

Insufficient capital.

External factors.

These are the 6 key reasons why businesses fail, based on a Google search.

But it's not that complicated.

I've observed many businesses.
It comes down to one thing.
It's simply: They ask the wrong questions at the wrong time.

After years of interacting with clients,

observing what other business owners do,

contributing to Facebook entrepreneurship communities...
I discovered many people ask questions that don't solve the root cause of the problem.

Maybe because I started my career as a therapist.
I helped my patients in rehabilitation.
So they could return home and be as independent as possible.

I solve problems... REAL problems.
I don't solve symptoms.
I target the root cause.
I don't believe in symptomatic relief.

But when I started my entrepreneurship journey...
It surprised me when I learned about marketing.

Many marketers, coaches, and mentors are simply selling "painkillers".

For example...
Some marketing coaches provide templates, scripts, checklists, blueprints, etc.

Then they tell their students to just follow step by step, and they'll succeed.

As if it's so simple.

The truth is... Many of them are just selling tactics.
Tactics work in certain conditions.
And they don't work in certain conditions.
Tactics change accordingly whenever there are changes in the market.
A tactic that works now may not work 1 year later, or 3 years later.

Strategies also change according to circumstances.
A strategy that works for Business A may not work for Business B due to a different target audience.

Principles, on the other hand, don't change.
Principles withstand the test of time.

Example of a tactic: Use a red button on the funnel checkout page to increase conversions. (Do you think it works for everyone?)

Example of strategy: Using Email campaign A for cold outreach versus Email campaign B for warm audience. (Obviously, the way we talk to different audiences is different)

Example of a principle: People generally buy when they feel safe and trust you. (This applies all the time. It's human nature)

The problem is...

Many coaches and mentors don't teach principles.

They teach tactics so the students continue to be dependent.
And they'll keep paying for coaching.

Until they lost faith and left to find other coaches for guidance.

Without understanding the underlying principles...
The students will never know what are the right questions to ask.

I've learned from many mentors and coaches.
I've observed what's happening in the market.

I concluded:
Many businesses prioritize Profits > People.
I'm not saying they're bad people.

It's just that they focus on profits more than the people they serve.

They focus on sales and marketing to acquire clients.
They often neglect the client experience.

They don't focus on fulfillment and retention.

They upsell frequently to extract more value from their clients.

If clients leave... They acquire a new one.
That keeps them on the acquisition hamster wheel.

The point I'm making is...

How can businesses not fail...
When the coach or mentor who's supposed to guide...
Are more interested in extracting more money from the students (who are also their clients)?
If a business owner has a coach or a mentor who serves their own interests more than the clients'...
The business is most likely doomed.

And because these people lack guidance from mentors and coaches...
They are generally confused and don't know what questions to ask.
Even if they ask, they're usually asking the wrong questions.
Because they're focused on the wrong things.

I'll show you the types of questions I've seen over the years...
And I'll show you the correct questions to ask to solve the root cause.

I'll also explain why.

So you don't have to guess.

*Note: Questions have been paraphrased and business names omitted for privacy purposes. The core of the question remains. The purpose is to learn to ask better questions. Not identify the person who asked. These examples are shown for learning purposes only. It's not to call out or shame anyone.

Question 1: I've just started a new company. I approached a few businesses to tell them about my services. They all asked for my experience level. I'm a new company, so I don't have a track record. How do I get clients if I don't have experience? I won't have any experience if there are no clients booking me.

Answer 1: Those businesses aren't bothered about your experience level. They're showing you they don't trust you yet. The question you should ask is, "How can I increase trust in my offer?"
You can increase trust by presenting a unique offer that has no risk to the clients.
When clients see there's no risk, they're more willing to give you the opportunity.

Another way is to create content. If your content is good in showing them you understand their problems... They already trust you before talking with you.

Question 2: I run a digital marketing agency. Several of my clients requested to pause their retainers. They told me they have budget constraints. They said they'll return when their finances are better. But none returned. How do I differentiate between those with real financial constraints versus those who have lost trust and left? What do you do in each situation to recover the relationship?

Answer 2: When clients ‘pause’ and don’t return, it’s usually not budget… It’s a trust leak happening somewhere in the relationship. For a marketing agency, there's no reason for the client to pause their retainers if the ads are consistent in making money. So if the client says budget constraints, they're actually hinting that the agency's work doesn't bring results. When the agency tries to retain the client at this stage, it's already too late.

Retention starts at the beginning of the client relationship.

Not after the sale. Not after clients already decided to leave.

Question 3: What can we sell next? How can we get more clients? What marketing campaign should we run? Clients keep leaving. I need more clients to replace those who left.

Answer 3: This is NOT a marketing problem. This is a retention problem.

Trust + Meaning = Retention.

Lack of trust and/or meaning leads to retention failure.

When clients are leaving... The correct question to ask is, "What can we do so the clients will stay willingly?" Usually, it's about fixing either "Trust" or "Meaning". It can also be both.
Fixing "Trust" takes priority. It's the foundation.

Trying to mask the symptoms by doing more aggressive marketing doesn't fix the weak foundations.

It just fills the top of the funnel...

It won't fix the leak.

Question 4: How can I make more money in my business?

Answer 4: The question should be, "How can I serve my clients better?"

People pay money for the value you provide.

Help them solve more problems...
Or solve bigger problems.
They'll pay you willingly when you help them.

You don't need tactics or gimmicks.

Just focusing on the money erodes trust.

Trust leaks when clients feel you're trying to extract instead of serve.

These are just a few of the questions I've seen.
Can you see that all of them are not focusing on the right things?

In all transparency...

Some of these questions were asked by people I don't know well.

They may or may not have a coach / mentor.

But it's understandable if they're unwilling to invest in one.

Because even though I've invested a lot of money in many coaches and mentors...

I still needed to figure out many things on my own.

Many people have been burnt too.

That's why trust is very low in the market right now.

When you don't pay a lot of money...

It's almost impossible to get direct guidance from the coaches and mentors 1 on 1.
I invested in buying many courses, group coaching, and masterminds.

Solutions given are mostly generic and unspecific.

Because they also have to cater to the needs of other students.

So why do businesses fail?
An unconventional answer is: They ask the wrong questions at the wrong time.
But if you dig deeper...
Many businesses fail because they don't have proper mentors and coaches to guide them.

Without proper guidance, business owners are left to figure things out through trial and error.
That boosts the probability of a failing business.

Want a business that succeeds?
Get a coach / mentor who has your best interests at heart.

Pick those who genuinely want to serve.

Pick those who are committed and have conviction in what they do.

Pick those whose working styles, values, and beliefs align with yours.

When that happens... You'll have the best chance to drive your business to success.

If what I shared resonates and you're looking for guidance...
Welcome home.

People > Profits.

Always.

- Herek