Why most businesses fail and what you can do to be sure yours doesn’t
It’s a scary thing to take a chance and start a business of your own. We know because we did it ourselves back in 2017. It’s a little known fact that most businesses fail in their first year. To help overcome this today we will discuss why most businesses fail and what you can do to be sure yours doesn’t.
- Research. Before starting any business you need to do your homework and that homework involves lots of research. You will need to determine if it is a viable business model or not before investing money into it. This is one of the biggest reasons most businesses fail. It’s because their owners fail to do the research before spending money on the business.
- Competition. What makes your business better than their’s? Is it your pricing, your policies, your hours, your product selection? Do you have an easier to navigate website then theirs? What is that will make a customer want to do business with you?
- Marketing. It costs money to get people to know about your business. This rings true with both brick and mortar (physical stores) and online businesses. How will you advertise and where will you do it at? How often and when will your ads be run? There are so many options these days to choose from so try to find what works best for you and your business. Experiment with different sources and budgets. This will be your biggest expense and it will be ongoing. You need people to shop your store (and hopefully buy stuff their too) or you will be out of business before you know it.
- Help. Do you have time to start and run your business by yourself or will others be helping you? If you are a physical store you have to have help with this because you simply cannot go it alone. If your an online business depending on your knowledge you just might be able to do it yourself.
- Hiring help. Where will you find potential employees to interview and hire? What kind of training (both in the beginning and ongoing) will you offer?
- Startup money. Can you fund this venture on your own or do you need help? Where will you get the additional funding to get started?
- Money coming in. How long do you expect you can be in business before you make that first sale? How long do you estimate it will take you to turn a profit? Running out of money is another of the biggest reasons most businesses fail.
- Time. One of the biggest reasons most business owners create e-commerce businesses rather than brick and mortar ones is not only the startup costs, but the time needed to actually run the business. If you have to quit your job to start your business you will run out of money for the business much quicker than if you had simply created an online business and chose to run it before and after your day job.
- No personal life. Burnout can happen to anyone, don’t let it happen to you especially when you are just getting started. Make sure you can make some time to have a normal life (the life you had before starting your business). If you spend every second of everyday stressing over your new business you will grow to hate your business long before it becomes successful. This is yet another big reason for business failures.
- Fear. You did the research and it looks like a good idea to get started, but fear of change has caught a hold of you. Most businesses no matter how potentially great they are on paper fail because their owners were to afraid to give it the green light and actually start the business.
- Negative people. Most of your friends and family will either think your business idea is foolish and insist that you not start it or they will lie and tell you what they think you want to hear until you tell them you plan to start it. At this point they will also ridicule you and insist that you just “play it safe” and keep your job. They will bombard you with reasons that it wont work to persuade you to forget about your silly/dumb (whatever adjective you want to use) business idea. They do this not because they don’t want you to be successful but because they are afraid of losing you. If you become successful they will no longer be able to relate to you. Perhaps you work with them and they will no longer see you at work.
The information mentioned above is not intended to dissuade you from your business ideas. On the contrary, the information mentioned above is meant to let you know what to expect ahead of time. We provide this information in hopes that your business will become successful.