Startup
5 Reasons Many Businesses Fail in the First Year
9:43 AM
Thousands and thousands of new businesses startup
every year, and many of them do not even make it through their first
year. There are many reasons that businesses fail all of the time, and
they can range from bad products to bad management.
Some people that have been successful in business do not always become successful on their first try, sometimes you have to live and learn and a failed business venture will help you learn what not to do if you plan on starting another business.
If it is your first time business venture then you should take a good look at failed and successful business models, this will help you understand some of the things that work and other things that do not work.
Some people that have been successful in business do not always become successful on their first try, sometimes you have to live and learn and a failed business venture will help you learn what not to do if you plan on starting another business.
If it is your first time business venture then you should take a good look at failed and successful business models, this will help you understand some of the things that work and other things that do not work.
Image Credit: DreamsTime
Lack of Experience
Lack of experience at running a business is one of
the big reasons many new start-ups fail within the first year or two.
Just because you do not have a lot of experience does not automatically
mean that your business will be a failure, but knowing this is a big
reason for business failure should motivate you to learn the ins and
outs before jumping in head first.
There are plenty of places you can
learn what needs to be done, you can research online and find advice and
stories that will help you gain some insight into running a business.
Another thing you can do is ask someone you may know that runs their own
business, pick their brains for a while and allow them to be a mentor
to you. This will increase your chances of making your business a
success after the first year and for many years into the future.
Knowledge is key, so learn everything you can before making the jump,
and don’t let lack of experience keep you down!
Bad Management
Bad management is another of the main reasons that
many new businesses fail, some can say this is due to lack of experience
and that could be true in many cases, but not all of them. There have
been many people that have started new businesses that had plenty of
experience but because of bad management choices the business fell flat
on their faces. Bad management can take many forms; one of these could
be bad management of finances which can cause a business to go downhill
really fast.
This is one of the reasons it is a good idea to hire an
accountant to help manage the financial part of any business, someone
that knows what they are doing can help eliminate the business failing
because of bad money management. Another example of bad management is
hiring people to run the business for you and not paying attention at
all to what is going on.
Some people think they can just start a
business and hire people to let them run it right from the get go, but
In most cases this is just setting yourself up for failure. If you do
hire people to manage and help run the business you should still always
know what is going on, plus you need to trust the people you have
running your business. Monitoring every aspect of your business will
ensure that things go well and it is the only way to do it as a startup.
Lack of Planning
Sometimes people have all of the right intentions
when starting a business, but many times people get anxious and excited
and start the business right up with little or no planning. Having a
business plan laid out before you launch is key, and this is extremely
important if you are looking to get some help funding the business at
the start up.
When you are trying to get a loan to launch your company
almost all banks want to see your business plan, so this is the first
thing anyone should do when starting a new business endeavor. Lack of
planning can hurt in many other ways as well, another example is not
having enough products to meet the possible demand you may encounter.
Thinking everything through beforehand is a must, as well as knowing
what you need to start off successfully. There are many organizations
that can assist you in starting a business for the first time, and
seeking out one of these types of organizations to help you get going
can be a big help and will definitely make sure you have planned
everything out so your business has a great chance of being a success.
Location
Location can be extremely important when you are
starting a new business, you could have an amazing business idea and a
great building but if your location is somewhere that people will not
find it easily it could turn out bad for you. It is good to find a place
where many people will see your place of business so you will get walk
ins and people coming by to check out what you have to offer.
Sometimes
even a struggling business can pull it together and survive if they have
the right location, and on the other hand, you could have a great store
or other type of business that is amazing but if it is not in a good
location the business will most likely fail no matter how good it is.
When starting your business try to find a location where there is
potential for a lot of people to see it, this will help more than you
can imagine and will be the key to your success.
Starting a Business for the Wrong Reasons
There are many people that start their businesses
because what they offer is something they are very passionate about, and
then there are also many people that will start up any business that
they think can make them a lot of money. If you plan on starting a
business make sure you are starting something that you have a strong
interest in, because if you are not going into something you love your
chances for success are very low.
If you are not passionate about what
you do other people will see that and in many cases customers will find
another company that does the same thing but is run by someone who
really cares and knows all about their products and services. People
that only want to make money with a business tend to only bother
learning a little about what they are selling, but in order to be
successful you need to know EVERYTHING about what you are doing, and
there will be many questions from potential customers that you need to
be able to answer.
If you cant answer the questions or do not have the
experience people will just go somewhere else. So if you are starting a
new company make sure you love what you will be doing, otherwise you
will most likely fail in under a year.
0 comments