Starting a business is very easy. Once you have capital, you get the needed things, you’re good to go. However, it’s not starting a business that matters – it’s sustaining that business, and succeeding while at it.
A lot of businesses have failed, and will continue to fail because business owners do not put the basics on ground. When you do not do the right thing, success will remain elusive.
Here are some common and uncommon reasons businesses fail.
1. Failure to write a plan. When a lot of people start a business, they usually make the mistake of not writing down exactly what they intend to do, and how they want to go about accomplishing it. Conceiving an idea is the start. Before you pump money into that idea, and try to bring it to life, ask yourself if it’ll work, how long it’ll take for it to really work, and repay you, and how you intend to go about accomplishing it. Without a plan, no business can thrive.
2. Absence of good leadership. The head of a business is everything. If the head isn’t right, there’s no way the tail can work, because the head directs the tail. How do you communicate with your subordinates? The kind of relationship you have with your workers goes a long way in shaping what they give you. You also have to consider investing in training programs to equip them with new ideas.
3. Lack of patience. I understand that the purpose of every business is to yield profit, but some businesses take a while to return investment. However, most business owners lack this understanding, so they want to quickly reap the benefits of their business. They sometimes go as far as eating into the little profits from the business, and end up lacking running capital. This has led to a lot of businesses folding.
4. Lack of persistence and determination. Nothing good comes easy. The greatest things do not come from a place of comfort. You will suffer and sometimes lose some things before you enjoy the fruits of that labour. Some businesses owners do not want to put in the required work, but just want to reap the fruits immediately.
5. The absence of focus. Businesses have failed because the owners of such ventures simply cannot look ahead, and beyond the present. So when they see their friends successful in a different line of business, they dump their own, and jump on the bandwagon.
6. Insufficient running capital. The problem with some business owners is they don’t know how to source for funds. They are always dependent on money their business generate to sustain it, but then, they forget that there may come a time the business begins to churn out low profit; what then happens? How do you sustain the business? You cannot depend on only one means of funds to run your business. As a business owner, you must look for all possible means to keep your business afloat.
7. Lack of product development. The most successful businesses are the ones that are continually reinventing themselves. You must seek to improve on your product offering as a business owner. Competitors are not asleep. You must outdo them to out-sell them.
8. Lack of a successor plan. No matter how long you think you’ll live as a business owner, you will not live forever. What happens to your business when you die? If you do not train and prepare someone trustworthy in your own mould to takeover when you’re gone, that’s just you killing the future of your business yourself.
9. Poor marketing. Every good business owner understands that marketing is the soul of an organisation. The most successful ones have a great marketing team. Unless you put in a lot of resources in forming one, your business will suffer. It’s also important to note that marketing involves every single part of the organization, yourself as the owner inclusive.
10. Bad Customer service. The customer is the market. How well you treat them, and how well they are with your service or product determines your longevity. The best companies have the best customer-business relations. They put proper feedback mechanisms in place to know how their customers feel about their various products, and they respond to their complaints swiftly. Most business owners often overlook this part, which is very inappropriate.
11. Unavailability of a good working team. Every organisation should have a team tasked with manning the affairs of that business. The success of an organisation depends greatly on it. Most business owner think their business only depends on them, but it doesn’t. Having a good team means you have support.
12. Poor business location. Location is everything. Some businesses are located in areas where it’s difficult for their customers to access their services and products. It is not good for success. A poor location also drains your running cost because you have to spend a lot of money (usually twice the regular amount) trying to sell your service or product.
13. Poor financial management. The monies made from a business must be used very wisely. When you use money meant for funding a business for personal problems, what happens when the business has a pressing financial need? The business always comes first. And of course, there’s always an order of preference. In an organisation, issues must be attended to based on their order of importance. When you spend money buying stationery instead of gas for the factory, how do you then, run the factory?
14. Premature expansion. Some businesses owners like to do more than they should sometimes. They run to open more branches because they see others doing it when they know they don’t have the resources to run extra branches simultaneously. What happens is the business suffers because it has inadequate support.
15. Reluctance to partner. Not everyone understands that a tree doesn’t make a forest. There are things you can do alone, and things you can’t do alone. What’s the point starting a business when you know you don’t have the finance to run it alone? And it can be easier having someone back you up. The funny thing is it’s not even a lack of willing partners that’s the problem; the problem is greed and pride. You just want to have it all to yourself. The most successful businesses in the world today are owned by more than one person.
16. Little or no business profitability. When you go into a business, the idea is to make money in the long run. When that doesn’t happen over time, the natural thing to do is to kill it off, because you can’t run into ridiculous debt trying to keep an unprofitable business. That is why it’s important to always make a plan. A plan shows you how profitable a business may and may not be.