10 Reasons Why You Fail In Business

One very interesting thing that is happening in the world today is that people are becoming very dissatisfied with living on just the income from their jobs. With job insecurities and low wages, everyone seems to see the need to get entrepreneurial. People are setting up businesses every day and yet more people are still on the way to set up theirs. However, the rate at which businesses are coming up is not up to the rate at which businesses are failing.

Out of every 10 businesses that are set up, not up to 4 grow up to succeed. Many that still exist are just managing to survive. Why are the businesses failing? Where are these business owners who started with very high ambitions of growing their businesses to high levels of success, getting it all wrong? I have put together these ten strong reasons why businesses fail and surely as you go through them, you will see yourself somewhere.

1.    No Vision

You cannot start a journey when you don’t know where you are going, but expect to get there. In simplest terms, your vision is the place where you intend to go. When you have a vision, it gives you direction. You can tell at every point in time, how far you are gone in achieving your vision and what is left to be covered. 

Vision also makes you more focused and disciplined. You know where you are going and anything that is not taking you there is seen as a distraction. It also helps you in making right decisions since all your decisions will be weighed on how they help you achieve you vision. 

Any business that is done with no vision will have no destination and so at best, can just be surviving and waiting to crash.

2.    No Passion

Passion has to do with drive and energy. Everyone has a passion for something. Your passions are usually the highest areas of your life where you invest most of your time, energy, interest and money. Some people are passionate about entertainment; others about dressing; others about education; others about agriculture; and so on. 

If you build a business around your passions, you are more likely to succeed because you will be doing business in an area where you are more willing to invest all you have (time, money, energy, etc.).

If your business is not built around your passions, the internal drive that you need in order to give in your best will be lacking and this will lead to failure.

3.    No Knowledge

Knowledge is power. You can have a great vision and much passion for a particular thing but if you don’t sit down to learn at least the basics of that thing, you cannot succeed in it. Your knowledge of the business you are getting into is the substance and the foundation of the business. You will build your business on that knowledge you have. 

You need to know at least what others doing the same business are experiencing, what the profit is like, how the business is affected by the different periods of the year, where the business flourishes the most, where the customers are found, who the main competitors are, etc. before you start up.

You may be failing in that business because you are building it on wrong or insufficient knowledge. You may even be trying to invest in a sector that is not viable and so are bound to fail. All that is because you don’t have enough knowledge about the business you are getting into.

4.    No Business Plan

Having no business plan is another very sure way of starting a business by failing already. When you don’t have a plan, you will just be doing the business anyhow. A plan makes you set goals and targets which from time to time you can go back to and it will tell you where you are. It helps you to analyze your business, strategize and re-strategize whenever necessary, to make sure you are on track to achieving your goals. With a business plan, you can better manage your business. 

You don’t need to study an MBA to be able to write down a plan. Your business may not be a very big one in terms of capital, number of workers and number of branches. You could sit down and carve out a simple plan. You plan should simply have details on how you want the business to evolve over the years, in terms of increase in profit, increase in production, increase in human resources, growth and expansion, etc. 

If you don’t have a plan, you will not manage your business well and it will fail.

5.    A Weak Team

When you start up a business, you may be the only one in it at the initial stage. However, with time as you are growing and expanding, it becomes imminent to hire people to join you in the business. This is a very important step in the life of any business. As you hire more people, you gradually build a team and your team needs to be strong enough to keep the business growing.

The strength of your team depends on how qualified each of the members are, in carrying out his/her duties and how well they have bought the vision you have and are willing to put in their best for it to succeed. Anything less than this, you have a weak team and stand a higher chance to fail.

Many businesses founded on great visions are succeeding today because of the people behind the vision. Where there is no vision, the people perish and where there are no people, the vision likewise perishes. Hire the right people and get the best results.

6.    Poor Management of Resources

Management is the act of utilizing the limited resources (money, men, materials, machines, information and time) to achieve goal through effective planning, organizing, leading, directing and control. One of the most important aspects of a business is the management. 

A business’ life depends a lot on the management. I have seen a falling business rise up to great strides again just because it got a new manager who was more efficient and effective than the former manager. Who is managing your business? How competent is the person? 

Many businesses fail because there was mismanagement of money, materials and the people working for the business. If you don’t know management, hire a good manager, pay him/her well and demand results. Your business will succeed.

7.    No Marketing

Have you ever wondered why big companies spend so much money to market their products? I use to wonder why until I got to know the role that marketing plays in the success of a business. Some people do business in the dark and very few people know they even exist. 

Marketing at a certain level is very expensive but it is usually very rewarding. Non-the-less, you don’t have to start at a high level of marketing for you to succeed. You can print your complementary card and give to your friends and colleagues, print hand bills and share, organize a small dance competition in front of your shop, from time to time to show case your products, do some promotion programs, etc. 

A business without marketing can do fairly well, at best. Marketing will bring your business to light and closer to your potential customers.

8.    Poor Management of Customers

Every business is centered on those who patronize it. Without these people, the business has no reason to exist. The goal of any business is usually to increase the number of these people so as to increase the inflow of cash. These people are called the customers. Usually, business people say the customer is king. But in most cases, this is just in theory. 

One big mistake you can make is to joke with your customers. Customers are supposed to be treated with much respect and honor. They must feel that their money is precious. They must be treated as kings before they give out their money and even after. 

When I was in Nigeria, I lived in Igbo land and witnessed that in business, business owners can even worship a customer before he gives out his money but as soon as he does, he becomes a no body. This is a very wrong approach to business.

If you don’t manage your customers well, you may never get to anywhere in business. In my article titled: “How to Win Customers” I share more on this.

9.    Paying No Attention To Quality

People love quality. They will pay anything if they are sure that what they will get is of high quality. Quality will keep your customers coming. If you cannot deliver quality goods and services, you will lose credibility in the sight of your customers and they will leave you. Most customers want to have a place where they can guarantee the highest quality of goods and services and they will stick to that place. 

Just one fake product of yours can destroy an image which you have built for many years. This is one very important reason why people fail in business. Watch out!

10.    Mixing Business With Pleasure

It is very common to find people who have failed in business because of this reason. Some business people mix their business with leisure, pleasures, entertainment and so on. They even go to the extent of using their business capital for these. Some give it out to boy-friends and girl-friends and to gamblers.

Your business is your source of income and a means of meeting the needs of people. If you get this straight, you will get more serious and bound to succeed. When it is time for business, face the business and leave every other thing. Don’t do your business like a part time endeavor. Give it 100% and that is what you will get. If you mix your business with pleasure, I can guarantee you that it will fail.

These ten reasons why businesses fail are very practical and I am sure you have found out why you failed or are failing. For you who is still about to start a business, you are blessed to know these before you start. Put them to practice and see your business succeed.

If you have gained some thing, make your comments below.


by Kadzem Claude

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