Starting a business is exciting on many levels: the financial freedom, the idea of being your own boss, and the feeling of success when you put your idea into action. However, there is a high barrier to entry in maintaining a successful business because seventy percent of all businesses with employees actually fail within ten years. Business failure is a harsh reality to and can be a difficult hurdle for potential business owners. Many factors come into play as to why these businesses fail, and if you are looking to start a successful startup, you want to be aware of these issues and learn how to avoid them. Here are some of the top reasons why most businesses fail.
Value to customers is at the center of any business, and any business owner must find a way to deliver it. A good rule of thumb is “under-promise but over-deliver.” Sometimes business owners are looking to “get rich quick” rather than focus on providing true value to their customers. Many business competitors will be creating value for their customers, and if you are not making the same effort, you will quickly find yourself in a failing venture. Listen to the needs of your customer base, and focusing on the process of providing good service to each customer, as opposed to focusing on a successful outcome will better serve a new business owner.
SmallBizTrends.com showed an infographic that reveals that forty percent of small businesses make a profit, thirty percent break even, and the remaining thirty percent lose money. In order for your business to find success, you need to be aware of and manage cash flows appropriately. You also want to have a contingency funding plan which is a reserve of money that you can rely on in the case of a hardship or obstacle. Many small business would be well served to plan to outsource accounting and finance needs so that the business owner can focus their time and energy on the core goals of the company.
Any new business owner should be focused on serving its customers and catering to their needs. If you are not staying in touch with customer feedback and suggestions, customers may become dissatisfied with your products and services. Real dialog with your clients and customers is key to understanding how you can differentiate yourself in a competitive marketplace and also to ensure that your value proposition is well-understood by your client base through your marketing and sales efforts.