Why do most of the small businesses die so far? If you’re planning to start a small business and have a lot of great ideas in mind then you should think about bringing up your perspective in front of the whole world.
But, before moving forward you have to keep one thing in mind which is statistically proved that 20% of the small businesses face failure at the very beginning or first year of their journey. And 70% of the small businesses can’t reach their 10th business anniversary to celebrate their wins. Failure and success runs parallel in all matters of our life. If you are successful at one time, then it might be possible that you face failure at some other time or vice versa.
But due to the fear of failure, you should never quit trying. Here I am going to share some of the business failure factors which you should keep in mind if you want your small business to run effectively and don’t want your great ideas to be a flop one. These failure factors are as follows:
Why Do Small Businesses Flop?
1. Investment in Business
Lack of investment or work capital is the major reason behind the failure of any small business. In certain situations, as a small business owner you must be aware of how much investment is required to keep businesses going on a day-to-day basis, including payroll financing; keep monitoring the fixed and diverse overheads charges, such as rental fee and efficacies; and to guarantee that outside contractors are paid on time.
On the other hand, the owners of struggling businesses are less in tune with the volume of revenue generated from sales of goods or services. This disconnects leads to investment shortfalls that can easily bring a small business at risk.
Another basic reason is the business owner or “you” yourself if you forget to mark the price on services or products. To stand out the competition in highly advanced industries you should prefer to decrease the cost of goods or services as compared to others. This trick should be used to grab the attention of your audience or to attract new consumers towards your business. This strategy is successful in some businesses.
While the tactic is effective in some circumstances, the businesses that end up shutting their doors are those that keep the prices of goods or services too low for too long. As the cost of production, promotion and distribution exceeds the revenue produced from new revenues, small companies have no option except to shut it down.
2. Lack of Business Plan
Planning a business is the key aspect for any small business. Planning your business at the early stage will help you with nearly every part of your business, from investment to management. If you plan your business early on, you can consume it as a roadmap and checklist during your small business project. And if you don’t have any smooth business plan then you can’t run your business successfully. For a successful business plan, you’ve to study and understand main areas of growth.
3. Unaware of customer needs and expectations
Your business will fail instantly if you can’t meet the needs and expectations of your customers. If you want to be successful you have to keep an eye on the changing trends and values in the market that can interest your customers. Try to do market research to find out the changing interests of your customers and use customer relationship management tools (CRM) to provide trending things to your customers first.
4. No continuity
If you really want market growth of your business then you should put attention towards the continuity action. You must focus on the things for a long period of time, because it will take a lot of time to build a small business. You have to keep pushing yourself forward, as motivation is the quality of every small business owner.
Try to take a new action on every single and stay committed to it, as it will help to increase your reflectivity and reliability. You’ll be amazed how easily these small moves lead to even greater successes.
5. No Social media accounts or website
If you’ve your own business today, then you should seriously think about having a strong social media presence on the most popular social media platforms or must have a beautifully designed eye-catching website for your business.
Utilizing social media platforms is the best way to increase the online sales of your services and products. All you’ve to do is to keep your social media accounts updated regularly regarding your recent products and service. This will help you in generating more revenue for your small business online.
Additionally, you should have a professional and well-designed website for your business too. It will help your customers to have a detailed knowledge about your business that How you get started? What are you doing right now? And how can they benefit from your business?
Most of the small businesses never put their attention towards these two basic elements. And sometimes the reason for ignoring them is that they don’t have much money to spend. Due to which they remain deprived of the great benefits of having social media presence or website and might face failure.
So, these are some basic factors behind the failure of small businesses. Apart from all these factors, your business success totally depends on you as a “business owner”. It depends on how you think? How determined are you? How much clear understanding do you have about your goals and values? These all things matter a lot in the success of a business.
If you want to be successful and get motivated then you should read the life history of Sarwar Pedawi (as an entrepreneur and a successful investor) at once. You can learn about his life history and his successful life career at SarwarPedawi.com.