Why your Business will Fail?
You must be having an idea about starting a new business or may have already started the business. Most likely you will be facing difficulties while running the business. Sometimes you know the reason and sometimes you don’t. There are reasons why your business may fail like most businesses.
Businesses are preferred over jobs by people because of-
- Long Term Stability
- More Money
- Self Ownership
- Your children may also reap the benefit
It is mostly said that most the new startups or businesses will close down. There is nothing wrong with it. It’s all because of mostly 6 reasons-
NO MARKET ANALYSIS
Businesses usually fail if they don’t study the market. Let’s say you are going to start a tech-based startup. Furthermore, you are reading news about declining stocks of the tech companies, regularly failing new startups in your tech industry, or some other business with great funding that you have already been established.
The best question you should ask before starting a business is -
Is there a requirement for it in the market?
A real estate business started during a falling market will most likely to be failed. It’s because you didn’t start a business while there was a demand.
FUNDING FUNDA
Starting any business requires money. Either you manage your finances on your own or by an accountant. Funding starts from the start of your business.
The cost of the establishment must be multiplied by 2. Everything is costlier than what you will estimate.
Sometimes you will start your business with less than the required funding. You can’t afford more loans. You will end your business with a loss in your initial wealth. Take the help of an accountant from the start of a business. This may feel like a burden in the starting but in the long run, it will be beneficial.
BUSINESS PLAN PROBLEMS
The business plan is the most important thing after finance. Yeah, you heard it right. The business plan should be defined after the finance. Money matters more than the plan mostly. There is a simple reason behind it- your business plan would most likely be executed before you. They may be in another country.
- Deciding a business plan may be challenging
- But once you decided a one and have invested in it, make sure to stick with it. Changing a business plan is highly defaming.
- Change your plan if you feel it to be highly wrong.
- A completely new type of business plan isn’t a great option. As nobody has ever worked over it, most likely it is going to be failed.
POOR REACHABILITY TO TARGET
How will you meet your customers? This thing is a must. First, you must know where they are? Then you would probably answer via target location, marketing or the internet presence. Advertisement on Amazon wouldn’t be great for selling flats. Your google ad is clicked by people in China more than in the US doesn’t make sense. The wrong people are being targeted. This would lead to extra expenditure.
Make sure the right persons are targeted in marketing. If it’s a physical business then the location matters. Initially sponsoring yourself would be a must for any new business. People will not directly change into the customers. It will take time. But a great internet presence is a must tell the people about you.
Digital marketing, fascinating website and advertisement are musts.
NO FLEXIBILITY
Gaining a customer base isn’t easy. But it is even more difficult to maintain that. The space you may be fulfilling may not be forever. The bigger player may come. So always keep an eye on the trends. They may provide you with a hint about your next step.
Eliminating the competition is always the best thing to do but it’s not always possible. So, be flexible with your business. It should not be so much that your customers will lose interest in you. Try to keep up with your reputation through great customer service and customer loyalty.
WRONG EXPANSION
It is an inevitable truth that you should grow your business. The twist is- only if it is a perfect time. Make sure you understand the people’s need and their behaviour in the new area. Your business may be well established in one area. But start from the start when expanding to a newer area.
If you try to expand it too fast and don’t pay time for strategy, planning and research then the financial losses can lead to the collapse of your whole enterprise.
FINAL VERDICT
Only 25% of businesses survive ≥15 Years. Through proper research, planning, strategy and marketing you can also come among them. You don’t need to be in that 20% of businesses that close down in their first year.
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