Top Reasons why small businesses fail, Business failure isn’t something you want to think about when you start a business.
But if you want your business to succeed, you need to know and avoid these some essential common reasons why businesses fail.
In essence, successful entrepreneurs are taking charge of the market.
Many met with great levels of success but a great many others failed.
It is reported that 90% of all start-ups failed. It is a scary figure but when you take a moment you will find out there is a reason those 90% failed.
According to statistics published in 2019 by the Small Business Administration (SBA), about twenty percent of business startups fail in the first year.
About half succumb to business failure within five years. By year 10, only about 33% survive.
The obvious one being they gave up. To really become a successful entrepreneur you have to build yourself, develop yourself and your character.
We will be looking at ways you can become a better entrepreneur and avoid the major reasons why businesses fail.
Lake to Make a Plan
Before starting any business it is imperative you have a plan by research the kind of business you want to go into. Firstly, think of what you want to achieve.
Think about your goal, the end result, what do you want this business to become? Is it to provide electric solar power to remote communities, or to make food accessible to office workers during work hours, or to introduce a clothing line that will appeal to youngsters in the university.
whatever it is you have to think of a motive and think up ways to achieve it, that should be the framework of your plan. One who fails to plan is planning to fail.
Do market research or feasibility study of the business you wish to start, find how it is done, how much it would cost you, and so on. When you have obtained all the necessary information you set a date and time you wish to start, the time should enable you to prepare and to find or save capital.
Make a thorough check of the plan, from A-Z, don’t leave any stone untouched, because the more thought out the plan is, the more likely you will be able to achieve your aims quicker and faster.
Another common and very important reason small businesses fail is a lack of business acumen on the part of the management team or business owner.
For instance, a business owner is the only senior-level person within a company, especially when a business is in its first year or two of operation.
While said owners may have the skills necessary to create and sell a viable product or service, they usually lack the attributes of strength and management and don’t have the time to successfully oversee other employees.
Without a dedicated management team, a business owner has greater potential to mismanage certain aspects of the business, whether it be finances, hiring, or marketing.
Smart business owners outsource the activities they do not perform well or have little time to successfully carry through. A strong management team is one of the first additions a small business needs to continue operations well into the future.
It is important for business owners to feel comfortable with the level of understanding each manager has regarding the business’ operations, current and future employees, and products or services.
A common business money mistake for failed businesses is having not enough operating amount of funds. New business owners often don’t understand cash flow or underestimate how much money they will need to get the business started.
As a result, they are forced to close before they have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales.
It is very important to ascertain how much money your business will require to start. You need to know not only the costs of starting your business but the costs of staying in business.
It is important to realize that many businesses take a year or two to get going.
This means you will need enough funds to cover all costs until sales can eventually pay for these costs. This business startup calculator will help you predict how much money you’ll need to launch your business.
You have to be very swift in taking decisions, entrepreneurship is like a war zone, a simple bad decision may spell the end for you.
So you have to be careful when choosing between options and make it fast. You cannot procrastinate or linger, that will be regarded as indecisiveness and that also will ruin your business.
The point is when a problem comes up, you are expected to deal with it immediately with the right/informed decision. This kind of sharp intuition will make you a very successful business owner.
Not Take Responsibility Of Your Action
When something goes wrong which is bound to happen sooner or later don’t upset someone else’s life by pointing fingers, just suck it up and wrap it as part of your learning curve, blaming others won’t get you anywhere.
It’s your job to take responsibility for your actions and as an entrepreneur, it means all the actions of all the others too. Anytime there is a slip-up, don’t be afraid to face it, the sooner you embrace the fact that you made that mistake the better, and the sooner you will get back to your feet and carry on.
Business is all about taking a calculative risk if you are not taking risks one would not be an entrepreneur or business owner in the first place. Some took it to such extremes that they quit their jobs just to venture into something they believe in.
You have to love taking risks to be any good at business, it’s full of obstacles that ordinary people will simply avoid mainly because of the high probability of failure, but remember with great risks comes great reward.
The Wrong Location
The location of every business is valuable very important and crucial to the success of most local small businesses. If your business requires walk-in traffic or a professional location to meet with clients, a good business location in the right community is essential.
A bad location could spell disaster to even the best-managed enterprise.
Lack Of Consistency
The majority of people think once they start up a business they are free to do whatever they want with it. what keeps and makes your business knowledge is your commitment and consistency in the business and this is what makes the business grow and to b successful.
In conclusion, these very few points should be able to put your track on the way to become successful and things to look at for why the most business fails. please leave a comment on what you think and your opinions are much welcome.