There are many causes of failures of small businesses. No business owner is gets everything right at the beginning. But with consistent effort to see that you do all you have to do, your business will stand a great chance of succeeding and thriving. The following are 8 things to that will make a business fail:
1. Insufficient Capital
So many entrepreneurs start businesses financially unprepared. Money is the life blood of any business. Without money, there is no business. Very often people start businesses with just enough to commence operations. Their hope is that they will begin to make profit immediately and that will take care of running the business for the rest of the life of the business. This is hardly the case. Before you begin your business, be sure you have a good capital reserve that can cover for production, overhead, materials and equipment, rents, etc. for at least one year.
2. No Business Plan
It is possible to start a business without a business plan and still succeed. However, the chances are very slim and when there is a good business plan which is well followed, there is a very high chance for success. A business plan does many things. It helps you get real and objective, test your level of preparedness, it gives you direction, it helps you monitor your progress and evaluate your performance at every level, it gives you a good understanding of the market, etc.
Even if you don’t think you need a very elaborate business plan, you still need a plan; at least something that tells you the way. Without a business plan you are not different from a blind person without a stick to lead. Don’t be too anxious to start your business. The same speed, at which you start, could be the same speed at which it collapses. Get down and plan and make sure the plan is written out.
3. No Records
I have seen many people do business without records. I assure you, they are failing woefully. When you want to succeed in something, you must learn to do it right. You cannot manage your finances without financial records. You cannot plan a good marketing strategy without records of customers, where they reside and what they want.
Records shed light to the management of your business. All decision-making is dependent on accurate records. Financial records will tell you how much is coming in and going out of the business daily. When you know this, nothing comes as a surprise. With records you can tell if the business is plunging into much debt or not and what this could do to it in the near future. To manage a business, you need records. Get a book and make sure you record every information that can be useful for your business.
4. Poor Management
Poor management is one of the most obvious reasons why most small businesses fail. Most small businesses are managed by their owners, who have little or no knowledge and skill of management. The worst cases are those that are managed by sales boys and girls.
Management has to do with being efficient in utilizing the little resources (money, men, materials, machines, information, space and skills) so that you are able to meet your goals.
For your small business to succeed, you need to have someone who is effective in planning, organizing, directing, controlling, communicating, creating and motivating in such a way that these limited resources are best utilized. If you need only one staff in your business, you need a manager; except you are able to function in that position, effectively.
5. Poor Marketing
Marketing is a key aspect of your business. Without marketing you can operate at best, as a mediocre. But marketing is not just about promotion. Promotion is one aspect of marketing. Marketing begins with producing a quality PRODUCT, in an attractive PACKAGE, for an affordable PRICE, at the best PLACE for easiest access by the customer, doing everything possible to make it appeal to the customer, by PROMOTING it. See my post titled “Twenty Practical Ways to Promote Your Business” for more on this.
6. Incompetent Employees
Another very important aspect of your business is the people who work on it. These are those we call the human resources and they are arguably the most important type of resource you have. They are the ones who utilize all the other resources in order to realize success. More so, they are the only resource that have a will and are affected by happenings. You can never guarantee that they will give you their best always.
If your business can pay only one or two workers for a start, make sure those you get are the best in skill, knowledge, and experience. Pay them your best and demand highly from them. They should be able to make the money they earn, many times over.
When you have staff who are well qualified, working in a good work environment and are well motivated, you are sure to get the best results.
7. Little or no Innovation
When was the last time you tried something new on your business? When was the last time you changed your method operations? Your business will witness very little success when you do the same things or do things in the same way. A popular adage goes that: “If you want to see different results you must be ready to do different things.”
Those who see the greatest success in business are those who are very creative. From the conception of the business idea, to its development and implementation, you can see much creativity. Have a day every week to spend at least 2 hours alone, thinking deeply about your business and something new to try out. Make sure no week passes without an innovation on your business. I tell you, success will be surer.
8. No Preparation For Rainy Days
Business like any other thing is not always rosy. There are days of thorns. Days of low turnover, low sales periods, lack of vision, debts, downsizing, embezzlement of business money by staff, loss of competent staff, and so on. Every business faces these. But when the entrepreneur is well prepared for such periods, the business is not so affected.
While you think a lot about how to take your business high up, don’t stop at that. Imagine the worst things that can happen and plan and prepare your mind, money and men for it. Make contingency plans for eventualities of any sort.
With the above in mind, you have a every reason to succeed in your business. Your business success is surer when you take them into consideration. Discuss these points with your partners and employees. That is how to guarantee success as a small business owner.
I hope to see your priceless comment below.
by Kadzem Claude
Wow! YOU ARE GOOD,U GOT ME THERE
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