Starting a new business can be easy. However, how long you are able to sustain your business is what differentiates the ordinary businesses from the extraordinary ones.
The points that follow, highlight the most common failures in many businesses.
Lack of funding: In addition to the costs it takes to start a business, you should have a long term funding plan. Your business might take some time to get on its feet. Until then, you will need to use funds from your own pocket or other sources.
The point here is that inadequate financial plans will be another cause of failure.
Poor strategic planning: You should have a solid plan in place before investing any money in your business.
You will also need to be realistic about the amount of time you will need to invest in your new venture. Sales and profits will increase with time, but you will need to plan how your business will survive before you start making money.
You should also have a plan on how to go about achieving your goals. Plan even the smallest details well in advance. Would you jump in the ocean without knowing how to swim? Of course not.
Good planning will provide you with the best chance for survival in the future and a way to avoid common failures.
Lack of expertise: Another cause of failure in business is not knowing what you are doing. Before starting any business, learn the basics of that business’ industry. You can pick up the finer points as you go along, but getting expert advice before opening your business is the best way to proceed.
Work in a similar store or line of work before opening one. Doing so will give you an opportunity to observe how the business handles different types of challenges.
Experience does count and lack of expertise will only lead to dissatisfied customers and a negative reputation for your business which is a common failure in business.
Lack of products: Plan your inventory well. Keep the right products stocked at all times. Even if you don’t have a particular item in stock, promise your customers that you will obtain it in a given period of time.
However, you must be able to keep that promise and honor your word. Not having the right products and your inability to procure them on time will force your customers to look elsewhere.
You don’t want to appear unreliable or irrelevant – especially in your business’ beginning stages.
Lack of quality service: In this competitive world, your customer service must be second to none. Excellent service will warrant repeat business. For that, you will need an efficient and courteous staff.
Make no mistake, having uninterested or rude employees will reflect poorly on your business and negatively affect your bottom line. Don’t let this be the reason for failure in your business.
Poor location: Your business location should be accessible to your customers. If you have a physical location, it should also be in a well-lit area, especially during the evening hours.
Having your business in a high-traffic area with adequate parking facilities is also important to your business’ success.
Not understanding the competition: Keep an eye on the competition. You must be aware of how their business operates. The survival of your business depends on how well you are able to adapt to the competition’s changing strategies. You can strengthen your own business by watching theirs and avoiding this common failure.
The above causes of failure have affected many businesses. Addressing these common failures before beginning your new venture will ensure that your business not only survives, but flourishes.