When I first implemented my business idea, I never wanted to think about myself failing, success was the only thing on my mind, I was always wishing that everything went right. After I failed, I realized that even if I don't want to fail in any business I involve myself in, I should always have the possibilities of failure in mind and avoid them at every instance.
Before starting any new business, I already have the experience on how to raise a new company to the top, I have learned from my failures and now have solutions to the problems that make new business startups fail. Although life is different out there and you will face a lot of difficulties but with the little I have learned, I will be able to list some of the reasons why small business startups fail.
Know Your Reasons For Starting A Business.
Some of the basic reasons why small/medium business startups seize to grow are tied up "WHY" the owner started the business in the first place. If the desire to make a lot of money, creating time for family and friends, be your own boss or competing with your rivals are the primary reasons why you are starting your own business, just know that these can only be achieved after a long period of time and are bad reasons why you should kick-start a business.
The right reasons why you should start a business is if failure is not a defeat to you, you are always ready to treat your mistakes as lessons and use them to succeed. There is a constant drive, patience, and determination with a good/positive attitude, and you are never willing to give up. That you have a great passion for that business you are about to start, with a strong believe an certified research that your business will solve a problem in the community.
Insufficient Capital
Most businesses fail in their first few months due to insufficient funds to operate. If you are unaware of cash flow as a business owner, you will underestimate the amount which will be required for a startup, this closes businesses down before any chance of success. Sale or income from a business will not pump in the way you expect them too, so be conscious about how much you need to get a business working for a year or more before making profits.
It is very necessary to have a complete verification of how much your business will need for a good kick off, just as it is necessary to start, it is also necessary to stay in business, the funds required to cover the cost of production of products and services should be fully calculated for your business not to crash.
Poor Management
Due to reports made after research, poor management has been noticed as the root of some business failure. Management proficiency in trending areas as production, finance, purchasing, selling and managing employees should be known by the new business owner in order to keep track of the business. If there is no expertise, help should be called for, to solve the problem.
The well being of a business should be a priority to the owner, regular organisation, care, study and control of all business activities should be considered by the owner. There should be continued research and study of the market, also the implementation of new skills that will improve the growth of your business.
Wrong Business Location.
To generate work traffic for your business, it has to be located in the right position, location is a very essential for business planning, even when your business is well managed, a wrong location can cause disaster to your business. When choosing the location of your business, you should consider factors like the location of other competitors in the business, the location of your customers or people that need your product and services, the history of the area & taste of the community, needs for warehouse and equipment storage.
The location of your business should be accessible, generate traffic, have parking space and lighting. The safety and condition of the location should also be considered. If your business does not require clients coming in for a consultation, your home could be your office, just for the sake of maximizing profits.
Lack Of Social Media Outlets.
No matter what kind of business you are running, just put it at the back of your mind that you need a social media page. Statistics have shown that the number of social media users have increased to 88.5%, and the numbers will continue to increase as time passes by.
There is a need for social media profiles or website in order to showcase your product and services, this will make your business look very professional and inviting. If your business involves sales of goods or product, customers could make orders online and you stand a chance to beat your business competitors who do not own any profiles. every business needs a website where customers can always come to, for information about your products and services.
Other good reasons why some businesses do no succeed are lack of controlled growth, over-expansion, lack of good planning, over-dependent on few customers or clients and the business owners attitudes.