No business is immune to failure, again, there is no secret recipe for success that goes beyond combining the principles of hard and smart work. Generally, businesses succeed and do well when they sell the right product, offer mind-blowing support, communicate the right message, and build sustainability around a great team. But once in a while, something could go wrong and a business will fail. In this feature, we will be evaluating the top 10 reasons why businesses fail.
1. Lack of clarity:
Most businesses especially start-ups never get to have the luxury of resources to run the business properly from inception; from money, manpower, or time. The truth is that these challenges are further complicated when the idea of experimenting different things at the same time begin to creep in. Once in a while, it could pay off but it often backfires. Lack of clarity with regard to ideas can kill a business. Misguided focus could prove fatal in most cases.
2. Lack of proper planning:
Lack of planning puts any business at a disadvantage. You can have a beautiful business idea but fail to fully implement it due to poor planning and you’re already on your way out of the scene. Plan everything from finances, strategy, products and services etc.
3. Poor financing:
Quite a good number of people often appear to lack a clear understanding of the amount of funds needed to run a particular business and sadly, they don’t even undertake any realistic market research to show the amount of revenue they can fairly anticipate to generate. If you are running a business, you need a solid and realistic financial plan to start with. Poor financing kills any business faster than it can be imagined.
4. Unrealistic price for products/services:
Your product or service may be wonderful, but if the price is above the price your customer or subscriber can afford to pay, then it will not sell and ultimately the business will be on its way to extinction. Yes, branding and proper marketing can do a lot but there are limits.
5. Terrible customer service:
Even if your product is good, the price is right and deliveries are on-time, it will all count for nothing if you treat your customers badly. Many businesses have died on this account. Customer is king in every business and you must treat them as such.
6. Lack of requisite skills:
At the inception of most businesses, the owner often saddles him or herself with the responsibility of doing everything, it can work in the short term but not in the long term. Every business needs individuals with special skills to drive it and if these individuals are not putting in their best, the business can fail.
7. Taking uncalculated risks:
Risk-taking in business is always essential but could prove to be detrimental when it was a foolish one. Just as it’s important to know when to take a calculated risk, it’s also important to be risk averse.
8. Poor marketing: Running a good business without advertising it is like winking at a girl in the dark. Most businesses fail because they don’t create effective marketing channels that will spur sales and boost productivity. Poor marketing can lead to the failure of a business.
9. Failure to build on your strengths:
Everyone has strengths. What some people may see as a weakness can also be a competitive advantage, thus a source of strength. However unearthing your strengths is not always an easy task: it requires lots of assessment.
As a business owner, you must discover these strengths and focus on them so you can leverage on them to grow your weaknesses.
10. Not learning from mistakes:
Many business owners fail at a business because they don’t pay attention to mistakes and they end up making them repeatedly. Sometimes you need to make a number of mistakes or missteps before succeeding at task. Once you hang on to a sinking ship on the way down, you’ll learn to identify when to abandon it next time around. Be conscious of these pitfalls, learn from past experiences and keep up to date with the latest trends.
See you next week.