Millions of businesses are present in the market. But 8 out of 10 business fails. Why do most businesses fail? Is there something wrong with businesses or owners? Many questions arise that why most businesses fail. Today we will try to know the main reason for business failure.
Reasons why start-up businesses fail | why do so many small businesses fail | why businesses fail!
Why should you read this article: If you are really serious about business and you want to be successful without any interruption in business then read this article. Always learn from failure in order to succeed in business. This article will help you find the main reason for commercial failure nowadays.
According to the 2016 data published by Small Business Administration (SBA), about 78% of small businesses survive the first year and remain to outlast for at least five years from half of all employer establishments. One-third survives ten years or more. It is far from the long-held belief that 50 percent of the business fails in the first year and 95 percent fail in five years.
Most of the business owners start a business with full of energy. Business owners believe that starting a business is enough to become a successful entrepreneur. But the cruel truth of the business is that it requires many strategies to succeed.
A startup is very common these days. If you look around 2 out of 10 then they have their own startup. It is very genuine reason that everyone wants to be free in work. But when we start a business, we mostly ignore the proper planning of the business.
How to Avoid Business Failure
In order to avoid business failure, we have to keep the following things in mind. First of all, we should know the cause of business failure, and then take action according to the lack of business arrangements. If you really want to avoid business failure, then keep one thing in mind that your business will need your blood and sweat. Here blood and sweat mean your hard work, complete dedication, your consistency, smart judgment, activism, knowledge and much more. But this is not enough for a successful business. Many other things are also necessary to succeed in business.
First of all, try to know the cause of business failure. Then we will also talk about some successful strategies that can definitely help you succeed in business.
Why does the small business fail these days?
Fail to manage:
Most people are planning to start a business with their regular jobs. Most people believe that it is possible to start a business with a full-time job. Generally, people think that in the beginning, they give less time to business and once the business will be in motion then I will spend full time in business.
This is a completely wrong mentality, I am not saying that you can not do business with your regular job. Some people have succeeded but most people fail to manage both jobs and businesses. If you fail to manage both of them, then it is quite clear that you will leave your business but you will not leave your regular job.
Business needs your full-time work. If you do not give enough time in the initial stage of your business, then it will likely fail to succeed in your business. This is what we call the risk. If you decide to quit your job and contribute 100 percent to your business, then the risk of failure of your business will be reduced.
Surrender too quickly:
If you surrender in business too quickly, then no one can save you. Most business owners surrender early without any second effort. It takes time to develop a business. Just one thing, if you do not give time, then business will not give you anything. Surrender too quickly in business is a very common problem these days.
Most businesses are not successful only because of business owners because they are unable to maintain their business and eventually the business closes. You have to understand that there is a lot of competition in the market if you want to move forward in business then compete with them. In this process, it will take time to stand on top. And this cruel fact is that those who are at the top are successful in the business in the long run.
Poor management also causes business failure:
Most of the business owner lack on managing the business properly. If you are alone or you have a team to manage your business, in both the case business required business management in order to survive in business. Here management means managing business in and out from finance to production.
If you are not expert in the certain area, you may hire some expertise. If you have limited or you are running short of the fund then you have to skill in those areas. Because without management skill sometimes it might create a problem in long run. You can learn from the internet. In today’s world, the internet is the great source of learning any new things. But you should have the zeal to learn. Small business owners can educate themselves on skills they lack. Hire skilled employees, or outsource your work to competent professionals.
Running a business without the business plan:
It is important for every business should have a business plan. Most of the small businesses fail due to lack of professional planning. It should be realistic and should be based on accurate, current information and educated projections for the future.
Basic Business planning should include:
- Detailing on business vision, goals, and key to success.
- Market analysis
- Need work force
- Potential Problems and Solutions
- Financial: Capital Equipment and Supply List, Balance Sheet, Income Statement and Cash Flow Analysis, Sales and Expense Predictions
- Competition Analysis
- Marketing, Advertising, and Promotional Activities
- Growth of budget and Management Company
Businesses never think about long term goal:
If you will not going to plan your long term goal then it is very difficult to know how’s your business will be 5 years down the line. If you are just only thinking about present then you long term goal will be going to be impacted. so, Make a business strategy accordingly.
Lack of presence of social media:
If you are not active on social media then it is very likely that you will lose potential customers who are social media available. Your social media presence also helps in Google rankings. If you have a website then you would like to promote your business site so that you can attract more customers through online. Social media also helps you in SEO (search engine optimization). Search engine optimization is the process of ranking your site well in search engines. 37% of Internet users follow their favorite brands on social media. 30% of internet users use social networks for research products. Social media allows immediate feedback from your customers, good or bad.
In social media, we get an opportunity to easily promote our products in a very busy time. So that you can quickly engage the customer. There are many benefits of social media, you can take your business up to the height with less effort.