According to Bloomberg, 80% of businesses and entrepreneurs fail in the first 18 months from start-up.
Translated and that means 8 out of 10 businesses, all go to waste and simply crashed and burned. And if you are interested or considering starting up your very own ventures into the world of entrepreneurship, then you are probably worried, right now.
You probably want to know as to what seemed to be the cause of this tragic and grim statistic. I mean, it is not just money; it is your life savings especially if you are a small-time dreamer. So, you would not want your hard-earned investment to just go out the window.
I have tried a lot of businesses in my life. Most of them have failed. Yes, it happens. But that does not mean that I should just give up.
Every failure that I face, I treat them as another lesson and hint to what could have gone wrong with my strategy. Every curve is a learning curve and every bump is a wake-up call.
Here are the things that I found to be the cause of my failings and please, do not judge me. I am human and I am prone to mistakes but I am willing to learn from them. And sharing you this is my way of hoping that it could be of help to you.
#1 Poor Financial Management
As a business owner, you must keep track of your money from incomings to outgoings. You must know how much your income on a daily, weekly and monthly basis is. Then compare them with your expenses from product replenishment, production, taxes, rent, electricity, and personal expenditures.
Do that and see if they all meet halfway. Figure out if the statistic shows some irregularities.
Once found the pitfall, try to solve it on your own. If the issue seems to be requiring a professional help, hire a professional bookkeeper or consult a financial advisor.
Also, you must have a rainy-day extra cash stashed away in case of harsh outcome for you and your business. Just like a contingency plan that could save your whole company.
#2 Sad truth: Business is a gamble.
Competition is the game we traders all play. It does not matter what sort of business that you are into. What matters is that what you can offer is your game changer.
When setting up for your company, you must provide a definite answer to these questions:
- How is your business going to stand out among the rest?
- What could you possibly put on the table that makes you the choice that everybody deserves?
- What is your competitor’s offering that is better than what you have?
If you recognize my point, you should know that what I am talking about is giving your business its own brand. From services to your company’s identity like the logo, colors, and tagline, all of it will give you the distinction that you are in fact unique.
#3 Not Prioritizing Your Customer’s Needs
Your customers are the main reason that you are in business and they also happen to be the life of your establishment.
That is why you need to understand what they want from your products or services. You must talk to them and find out what they think by asking for feedbacks.
It can also be of help if you try to treat them as friends or on a more personal level. Keep in mind that good feeling is when they feel at home. So make them feel welcome and at home. That way, they will keep coming back to your establishment whenever they want something that you are offering.
Remember that it is best to talk to them now and find out where you could be going wrong or talk to them later when you have already lost big time and still find out where you went wrong.
#4 Poor Leadership
A fortress’ weakness is often found inside its own structure. One of the most common causes of failure of a business is when the leadership breaks down.
All of us have our own personal issues and weaknesses. But it should not affect or be the cause of our own failings.
If you have issues with your anger, fix it with anger management program.
If you lack the ability to communicate or skill to relate with other people, find a way to learn them. The market is about the conversation so communicate.
If you need to learn more about your chosen trade, go out and study other similar businesses or attend training courses related to your field. Or better yet, find a mentor.
Success comes when you improve with personal development because your business is yourself. People will see you and they will look at your business the same way they look at you. Show respect and they will respect you back.
#5 Not Enough Knowledge for Your Market
When starting out for a business, there are things that you must consider:
- Location
- Foot population
- Demand
- Timing
The location is important. A commercial area should be your first choice as it ensures the visibility of your establishment.
Foot population is your traffic. It is the number of people that a location has to offer at any given time.
Demand is about what people wants. Is it an everyday necessity or otherwise?
Timing is the part where you identify whether your products is in line with the season. You cannot expect a good sale when you are selling ice in winter. But it will not be a problem if your product is about wardrobes and clothing. Well, you get the point.
As much as we all want our investment to go at the right place with us doing the right decisions, we have no choice but fail and succeed just like everybody else. We will fail if we are not doing things right and succeed if we follow the right track and make sound decisions whenever it is necessary.
About the Author
William Bourn is one of the pillars of crazyessay.com alongside his college peers. He functions as both writer and social media ambassador for their business. He occasionally makes podcasts for students and newbie bloggers to better their writing. William continuously practices corporate social responsibility by donating to various foundations.
Also published on Medium.
