A business failure is something that you cant easily digest as you put all your soul into your business, thriving hard. And after this much effort if you fail, you need to know certain things. Its the time when you have to look back and build a strategy for yourself. Here are 7 solid reasons for business failures and how you can avoid them.
1. Starting your business for wrong reasons
You could have thousand reason to start your business. The desire to make huge money? The thought that you could spend enough time with your family if you own a business? Or you no need to be answerable to anyone as you would be the boss? But these questions are the benefits one could attain as a fruit for years of hard work.
To start your business, you should possess:
· The passion and love what you believe in doing
· When others pull you down, the determination you show
· Raising from your failures
· Man of honesty, integrity and interactive with others
2. Poor management
Handling tough times is the primary skill that is needed for an good entrepreneur. The main reason for a business to fail is poor management. As many entrepreneurs lack business and management expertise in few important sections like finance, purchasing, selling, production and hiring the right employees, having inadequate knowledge in these stuffs will pull their leg down. So whenever you realize that you are weak in certain sections, you need to seek help from advisers or mentors and be prepared to learn all that you could accumulate.
To overcome these problems, you need to educate yourself on the terms that you lag and create an ambience such that you are surrounded with highly talented people by hiring skillful staff in your concern.
Ignorance could be the greatest reason for your downfall. You need to learn, analyse, organize, plan and control all the operations of your business at a regular interval of time. You should be aware of the current market, your potential customer data so that you show enough concern to monitor these things as they play a vital role.
3. Lack of money
Having insufficient fund to raise for your business is the most common reason for a business failure. A good entrepreneur should never underestimate the amount of money one need to put in the business. You need to seriously understand the cash flow between the income and the expenses.
You cant easily take into account of how much fund you need to raise for your business. So it is always better to have a proper financial plan to raise your fund. You need to manipulate not only the cost of starting the business but also the cost of maintaining your business till you reach a safer zone.
4. Wrong location
When you start up a local business, the prime factor that enhances your business is a proper location. You need to know the proper location of your business depending on the business you do. You could be doing well with your business, but remember a bad location will affect your business drastically.
Before you choose your location you need to consider these points:
· Where you have customers
· Traffic, parking facility, lighting
· Equipment storage needs
· Location of competitors
5. Lack of planning
You need to sketch a proper plan to succeed your goals. Lack of planning will shut you down and will act as a hindrance in your career. So before you start up a proper business, have a sound business plan. Many entrepreneurs fail as they don’t have a proper plan. When you prepare for a proper plan, be ready to focus every objective.
Your planning must consider these following points:
· Vision and goals
· Workplace needs
· Market analysis
· Financial sections
· Analysis of your competitors
· Marketing and promotional activities
· Budget monitoring
You need to consider these key points while planning for your business. Also remember that when you seek for loan for your business, your bankers will ask for a business plan.
6. Over expanding
You need to know the right time to expand your business. You have to focus in expanding your business in slow and steady growth. Having a procedural step to move ahead in expanding your business will fetch you success. Many business enterprises fall for bankruptcy because of expanding their companies.
And at the same point, you should not repress your companies growth. You need to concentrate in building your expansion in slower and stable manner.
The best time to start your expansion is when you attain a strongly customer base and a sound cash flow. So prepare yourself before you set the idea of expanding your business.
7. Lack of website and social media presence
Only in US, the number of internet users are approximately 88.5 percent of the population and e-commerce sales ( $394.9 billion in 2016) according to us census and this continues to raise every year.
With this survey, you could understand the power of websites and social media presence. A well planned business should have a stunning website that allows the audience how to avail themselves of their product and services. So having a website would elevate your sales. Companies like Wixgle provide ravishing websites for their clients all over the world. Presence of social media has become mandatory factor for a successful business. You need to have professional profiles in social media platforms in order to compete your competitors.