Why some businesses don’t work and end up failing? While some people might say that it’s all luck (which is not entirely true), there could be many logical reasons for such failures. Here are a few major reasons why businesses fail.
- Fast Uncontrollable growth
Speeding up things in your business to satisfy investors with early expectations and out of control growth in your business might land you up in serious trouble. Create goals that are possible to achieve realistically and expand only when it is necessary.
- High Expenditures
Over spending your start up investments and not keeping a proper track of your expenditures can make your business fail and run into debt very soon. It is very much necessary to keep record of your company’s finances and expenditures especially at the beginning.
- Low Savings
Always maintain a good amount of emergency savings. You don’t when times may change and turn out bad for your business. Cost of utilities, raw materials might just shoot up. This is when you will require this reserve cash.
- Inefficient working staff
Poor service and incompetent employees can ruin your business. Make sure your employees are well trained to deal with a wide range of customers or clients. Discuss you business goals with them and help them achieve those for you. Also, employees need constant monitoring. Make sure you provide that.
- Bad Marketing
Customers must be well aware about your business/service/company/products. Advertise your business. Use the internet, social media, banners, email etc to promote your business. Choose a highly effective marketing strategy; make use of your management lessons.
- Inadequate planning
Planning is a very important aspect of every new business. Inadequate planning by entrepreneurs is a major reason why many businesses fail. Set short term goals and long term goals. Keep planning your business simultaneously along with running it. It will give you an insight into the future and major turning points in your business career. With the changing times, one must also learn to change the face of his/her business and adopt new methodologies or working procedures.
- Location related issues
Location is a very important factor you must consider when you are setting up your new business. Choose a location for your business which is easily accessible and is easily connected to your clients and customers in terms of transportation. Also, do a research on the competition and the type of businesses that run in that particular area where you are willing to set up your own business.
Overconfidence kills your business real bad. Never be overconfident about your business or future plans and never underestimate the competition. Learn to fear the competition, that’s the only way you can prepare to win it.
- Customer care
Take uttermost care of all your customers or clients on priority basis. Treat them with respect, nobility. Make them feel important and listen to their grievances. Winning customer minds is the most important success mantra of your business.
Follow the above mentioned tips and you have just increased your chances of becoming a very successful businessman/woman.