When starting a new business, the last thing on your mind is failure. But if you analyze the causes of failure from the beginning, you will not be likely to fall victim to them.
Here are 7 reasons why businesses fail and some tips from numerous experts about what a business owner should and should not do to keep a new business afloat. There are some key elements that we should not avoid in order to keep our business alive.
1. Starting a business for the wrong reasons
If you are thinking of starting a business with just the idea of making as much money as possible then you are wrong. But if you are really passionate, and really believe in what you want to do, then it is a good opportunity for you. First study the market so that the product or service meets a market need. You should always learn from your mistakes and failures should not scare you.
2. Poor management
Neglecting a business is also destroying it. A successful manager is also a good leader, who creates a work climate that encourages productivity. He or she should have skills in hiring competent people, training them and should be able to delegate jobs. A good leader is also capable of strategic thinking, turning vision into reality, facing change, and anticipating new opportunities for the future.
3. Insufficient capital
A common fatal mistake that makes many businesses fail is not having enough operating funds.
It is important to note how much money your business will require, not just the initial costs, but the costs of staying in business. It is important to note that many businesses take a year or two to set up. So you need to have enough funds to cover all the expenses.
4. Location, Location, Location
Location is very important for your business. Just as it can lead to the prosperity of your business, it can also lead to its bankruptcy. Some factors to consider are: your competitors' location, lighting, parking, traffic, etc.
5. Lack of planning
Anyone who has ever been at the forefront of a great and successful event knows that if it were not for care, methodology, planning, strategy or hard work, success would not have followed. The same can be said for most successful businesses. It is very necessary to have a business plan. Many small businesses fail because of fundamental flaws in their planning.
6. Expansion
The main cause of business failure is often that owners err on the side of when they need to expand their business. The focus on slow and steady growth is optimal. Most bankruptcies have come as a result of rapid expansion. At the same time, you should not delay growth, once you have established a strong customer base, you can start expanding your business.
7. Not having a website.
Simply put, if you have a business today, you need a website.
Every business should have a well-designed professional website, which enables users to easily find information about the business and how to take advantage of your products or services. Remember, if you do not have a website, you will most likely be lost in your business. And make sure the site advertises the business for good, increasing revenue rather than lowering it.