It now a norm in our country that youth owned businesses tend to fail just after a couple of years after they started. It is quite sad because having your own business is empowering and frees you from being another person’s servant. When you’re starting a new business, the last thing you want to focus on is failure. But if you address the common reasons for failure up front, you’ll be much less likely to fall victim to them yourself. Here are the top 10 reasons why businesses fail.
1. You Don’t Know How to Market Your Business
Not every business owner is born knowing how to get the word out about their business, and that’s fine. But when a business owner’s shortcomings put their business in jeopardy, that’s when somebody must take responsibility and take action. Yes, marketing is an investment in time, money, or both, but an essential one.
2. Your Prices Are Too Low.
Pricing products tends to be a bit easier than pricing services, because you know what it cost you to buy or make those products, so price can be determined easily based on desired profit margin. But even with business services, you’ve got to factor in things like overhead (Internet service, heating/cooling), salary, and office expenses. Your profit shouldn’t be so scant you have difficulty paying your own bills.
3. You Don’t Really Know Your Customers
You know who you think they are, but unless you’re really clued in to your demographic, know what makes them tick, and understand their problems, you’ll do a terrible job of trying to present an appropriate solution.
4. You Think Social Media Doesn’t Apply to You.
Regardless of whether you’re a global accounting firm or the bakery down the street, you should engage in a social media campaign to help you get more customers. After all, it’s the keywords you use on your website that help the right people find you, and the links you’ve got online that help solidify your brand reputation.
5. You’ve Got the Answer For Everything.
There’s a bit of ego that comes with running a business. After all, if you were smart enough to figure out how to launch this company in the first place, surely you’re smart enough to figure out how to design a logo. Or manage your finances. Or tell everyone else what to do. Unfortunately, the more micromanaging you’re doing, the more harm you’re probably doing.
6. You Can’t Handle Growth.
You started small and didn’t expect to burgeon overnight, rapid growth isn’t always a blessing. If you’re not prepared for the strain your servers will experience, the number of sales to process, or the flood of customer service calls, you risk seriously harming your brand’s reputation.
7. You Don’t Have Business Savvy.
While it’s not imperative that you have an MBA to start a business , a solid understanding of finances, management, marketing, leadership, and sales will take you far. If you’ve mixed your personal and business finances, have trouble managing staff, or are just throwing your hands up at running your business in general, your risk of failure is multiplying by the minute.
8. Leadership Failure.
Your business can fail if you exhibit poor management skills, which can be evident in many forms. You will struggle as a leader if you don’t have enough experience making management decisions, supervising a staff, or the vision to lead your organization.
9. Not In Touch With Customer Needs.
Your business will fail if you neglect to stay in touch with your customers and understand what they need and the feedback they offer. Your customers may like your product or service but, perhaps they would love it if you changed this feature or altered that procedure.
10. Unprofitable Business Model.
Aking to leadership failure is building a business on a model that is not sound, operating without a business plan, and pursuing a business for which there is no proven revenue stream. The business idea may be good but failure may come in the implementation of the idea if there are no strategic guidelines in place.
