9 Sure Ways to Make Your Business Fail

Business FailureAccording to the Small Business Association, the majority of newly established small businesses will not survive past five years. Such statistics may not sound encouraging if you have recently started your own small business, but with a little bit of planning you can easily buck this trend.

The following are a few key factors that, if left unattended, can cause even the best business idea to be unsuccessful:

1. Lack of effective planning. Business planning is a continual process of setting goals, developing plans, and working every day to achieve them. Proper business planning spans all areas of the business including budgeting, tax planning, growth opportunities.

2. Failing to monitor the business. Planning means nothing if you are not monitoring how well your business is running and making necessary adjustments. You should pay attention in particular to your daily cash flow, productivity, and the movement of products through your business.

3. Lack of necessary cash flow. One of the biggest reasons why small businesses fail is that they are unable to get the funding they need when they need it. Keep your options open. Even if you are having difficulty securing a standard business loan, know that there are other financing methods available to small businesses, such as equipment leasing, invoice factoring, vendor financing, and business cash advances.

4. Ineffective marketing techniques. Marketing is essential to expanding and maintaining your customer base. If your current marketing techniques are not bringing in customers, then reevaluate them. If you do not have the time or knowhow to effectively market your business, then hire someone else to do it.

5. Ignoring competition. Business success depends on how effectively you can differentiate your products, services, and solutions from those offered by your competitors. Your unique selling point is your greatest asset. In order to maintain your competitive edge and stay in touch with current market trends, you need to be aware of what your competition is doing.

6. Out of touch with customers. Having a personal relationship with customers is an important asset that many big corporations do not enjoy. In order to maintain good relations with your customers, you should focus on quality products and service, monitoring customer satisfaction, and asking your customers for suggestions or improvements.

7. Not actualizing employees. Many small business owners do not realize the potential hidden within their own workforce. When your workers are happy then productivity rises and customers have a more positive experience that can lead to an increase sales. Your workers are also a source of business-improving suggestions and problem-solving ideas. Therefore, make sure to establish a system of employee advancement as well as a system that recognizes good work performance.

8. No research and development. To be successful, a small business must set aside time and resources to research and development to determine possible areas of expansion and to implement cost-cutting techniques. This ensures that the business is running efficiently and improves flexibility in response to market demand.

9. Lack of information. Most business owners have either never received a formal business education or are inexperienced with running a business, and they may lack the tools and ideas necessary to successfully run their businesses. The good news is there are numerous guides, articles, and tutorials available on line (like Entrepreneur , or the Wall Street Journal) that can give you practical advice and an extensive business education.

Don’t become a statistic!

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