There are many ways for your new business to fail. The biggest problem is that most of these things can be managed but time and time again they get overlooked. I have been on both sides of the proverbial coin flip when it comes to running a successful or unsuccessful business. Now that I have openly admitted to this some of my detractors may question my knowledge regarding this topic as they are judging a book that they haven’t read by the cover. So, to silence the naysayers who only believe what they see and not what they hear, prepared them to be enlightened.
My first Swaray into the world of entrepreneurship began when I was a young person. I loved sweets, especially candy and cakes. I developed a habit of trying to get my fix for these delicious candies at almost all costs. My father always had me doing yard work and these types of chores I didn’t know at that time he was teaching me lessons that I would need later on in life. I only knew If my dad asked for my help then I needed to comply. One of the neighbors needed their lawn cut and a few other things so I asked my dad if I could borrow the lawn mower, and he said sure. I cut some of the neighbor’s yard and got paid for it. I got every candy I wanted plus money to spare that wound up going to the arcade and pizza slices.
Without putting any emphasis on what I was doing I had created a new world for myself that allowed me to get whatever I wanted at the time without any real oversight. This was a huge milestone in my becoming self-reliant. I was creating a brand-new paradigm for myself that made me feel as if anything were possible. It’s a funny thing when you have a breakthrough like this one that seems to have you so high above the ground only to send you crashing back down again. You see self-doubt had begun its daily assault on my confidence. At first, it would be others that would question the validity of any thoughts that I held that were not in alignment with low-level thinking. I was surrounded by people who did not show true confidence in my ideas just criticism. Hey, that’s why we grow up and grow mentally learn to think for ourselves, and tune out the noise.
It was during the times I felt most alone I was very creative and, in my head. I loved to draw, and I loved cars, so I drew mostly cars. At first, the drawings were so- so you could at least tell what they were but then they got better. I realized by actually taking action and allowing myself to perform I yielded the best results I could at that time for my artistic skill level. I use this same approach today as I tackle many different tasks such as writing blog posts. As I look back now when I first began writing blog posts my writing wasn’t the best, but it wasn’t the worst either. I had to sit still and hone my thoughts and up my skill level to communicate effectively. In other words, I needed to find my voice and I did. My unique style combined descriptive words as well as an emphasis on getting in the reader’s head. I wanted my readers to have a clear concise view of what I wanted to convey to them as if I was having a conversation there with them. My understanding that has been developed by many years of struggling to communicate with often difficult people and situations finally began to pay off. The more I write the better I get at expressing my views to the world. This is one of the reasons I believe that this post will speak to people who may be having a hard time in life right now. One of the main reasons a business fails is communication. Communication is in my opinion one of the most vital skills you must master in order to create an environment for success. Several other key components willhinder any business and cause it to fail. The following paragraphs will go into detail about each one and provide solutions to remedy them.
So, you’ve just decided to go into business as a small business owner and it’s so exciting but deep down inside you have some worries. One of the worries could be where I find capital to fund my business. This is a very important question and one you must get right if you want to be one of the new businesses that survive the first three years. According to Google Roughly a third of new businesses exit within their first two years, and half exit within their first five years. The survival rate of new businesses has been remarkably consistent over time. (Courtesy Google) So what is one of the reason’s that a new business could fail is starting up with too much debt. This is something that should be completely clear from the inception of business creation. What the average person needs to know about running a successful business is you cannot be successful if you’re drowning in debt. When you calculate all of the costs involved- expenses then you calculate sales and subtract the costs you need to have a net gain for the balance sheet. Many new business owners go into a heavy debt burden thinking this will help them become more successful most are wrong. Once a business is up and running it could become very difficult to spot these flaws while the business owner goes through the daily operation of the business. The reason for this is that money will be flowing in and out of business and unless careful audits are done a negative cash flow could go unnoticed.
Another problem new businesses deal with is not having a business plan. I know you’re thinking about how this could be but nonetheless, it’s happening at this very moment. As a marketer, I would say you need to have an actionable plan in place before said business commences. With that said there are many reasons why a plan isn’t in place such as a lack of understanding of what the actual needs of the business in question are. Also, what are the roles of each operator who conducts work on behalf of the business? This can be resolved by simply doing your due diligence on the performance of successful businesses in your niche. Become a copycat so to speak do what the most successful businesses are doing in other words copy them. How many restaurants are carbon copies of one another? A lot because this shit works you don’t reinvent the wheel, but you will need a wheel to get from A to B.
Have you ever been around certain people who no matter how much money they have are always broke? The reason for this is because of a simple flaw that they display, and this very flaw can destroy your business. Mismanaged cash flow- Right now many new businesses that appear to be successful are slowly but surely on their way to ultimate failure because of this. Most small business owners are not accountants however they can hire an accountant to track spending within the business. Understanding your debt ratios could be helpful to avoid some real headaches.
The next reason why most new businesses often fail is a real sensitive issue, but it needs to be addressed. Lack of effective leadership- When the person at the top i.e., management has no accountability then this could result in problems. The way to solve this is to have meetings with business partners and employee’s get feedback. The ego that most small business owners have can be the difference in getting the proper feedback within their organization that ultimately help its growth. The way to solve this problem is to get your business evaluated by someone who can identify what steps you can take to remedy issues within your organization.
The last reason we will touch on in this post why most new businesses fail is not being able to adapt. This is so critical because a business could be perfect and just fail and nobody’s none the wiser. You have seen a business open its doors only to close just as fast because they were not progressive and getting with the times. The way to solve this is market research in fact if you have a small business and need market research to help innovate and perhaps save your business you should have emailed us yesterday because every day you wait for your closer to disaster. A turnaround and effective marketing could change not only the trajectory of your business but your life.
According to data from the Bureau of Labor Statistics, as reported by Fundera, approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed. By the end of the fifth year, about half will have failed. And by the end of the decade, only 30 percent of businesses will remain — a 70 percent failure rate. (Courtesy Google) Source -By Timothy Carter January 3, 2021, Published in Entrepreneur.
Here are some graphs depicting the actual rates that new businesses fail in the first 10 years.
The goal when anyone starts a new business should always be to expand growth and consumer satisfaction. I truly believe that if you begin to adopt this ethos into your thought process and in everything you do you will be happy and successful. However, if you are struggling and need a hand, please reach out to us by clicking the post below.
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Originally published at http://superiorblogsandmore.wordpress.com on October 4, 2022.