Why do Eight out of Every Ten Businesses Fail?
- 12 Apr 2021
Did you know that eight out of every ten businesses fail within the first year and a half? That ultimately means that 80% of companies crash and burn. If you want to make sure that your business is not another statistic then the only thing that you have to do is take a look below.
Of course, one of the main reasons why businesses run out of steam is because they run out of cash. That being said, there are a lot of cracks that will appear in the foundation before you ultimately reach the point of complete financial collapse.
You’re Not In Touch with your Customers
If you see a potential opportunity that is in the market or if you have dreamt up an idea, then you’ll probably retreat afterwards. This is the worst move that you can make. The main reason for this is because you need to work hard to understand your customer and your audience before you take it all to market.
You need to walk one thousand miles in the shoes of your customers and you also need to work hard to try and understand what they want from you. If you cannot do this then you may find that you end up losing out overall. This is the last thing that you need. Your customers hold the key to success and they also show you everything that you need to do in order to make it big. If you can do this, success will come to you in no time at all.
There’s no Differentiation in the Market
There is plenty of noise and chaos if you are fighting for the scraps at the bottom of the barrel. If you want to avoid doing this at all, then you have to make sure that you are unique. You need to stand tall above your competition and you need to make sure that every week that goes by is not a constant struggle. The solution here would be for you to address one core element.
You need to find out what kind of value you bring to the table and you also need to find out what makes you unique when compared to the other people who are in the marketplace. If you need funding, Swedish Prekredit.com can help you with that.
Failure to Communicate
Next up, failure to communicate. If you run a business then you have to make sure that you are communicating well with your customers. A lot of entrepreneurs work very hard to try and discover a point of differentiation. They then ruin their idea because they do not get their message across which is both clear and concise. The solution here is, believe it or not, very simple. You have to make sure that you learn how to communicate better. You need to know the language of your customer and you need to use the words that they use, right back at them. Be clear, be concise and most importantly, be compelling.
You probably see it all the time in the media. People end up going down very hard, simply because they end up making poor decisions. Start-up entrepreneurs who go down hard usually do so as the result of self-sabotage. Your solution here would be for you to wake up and realise that your business is your brainchild. If you struggle with anger issues, then you need to solve it. If you do not work on your personal development, then you may find that it is almost impossible for you to succeed with your professional development. You have to make sure that you are not standing in the way of your own success. If you do then you may find that you end up never achieving your full potential and this is the last thing that you need.
Not Having A Profitable Business Model
Failure to achieve a product or market fit will go against you. Entrepreneurs may well have the above points sorted out, but if you do not have the right business model then this will work against you. The solution here would be for you to try and move swiftly without having to spend a lot of cash. You need to use tools such as lean marketing and minimum viable products. Experimentation is critical as well.
Not Having the Right Team
Sure, the person who you are hiring may have a lot of drive and they may also be willing to work with you to make sure that you get from A to B, but do they have passion? If you are hiring someone based on their technical experience alone then this can work against you. You may find that you end up with a team who do not care about whether your idea succeeds and this is the last thing that you need. If you want to get around this then you have to make sure that your team cares about your company and your idea, rather than just the job. If you don’t make sure that this is the case, then you may find that they end up jumping ship if things take a turn for the worst. This can leave you in a worse position overall and it can make it that bit more difficult for you to be successful. If you want to make sure that your team is passionate then you simply need to ask them why they are taking the job, what motivates them and why they trained for the position they are working in right now. If you can do this then you can get the overall idea you need and you can also take the time to make sure that you are making the best decision possible regarding the future of your business. If you need some further help, then remember that it is always more than possible for you to hire a business mentor. It’s also possible for you to really capitalise on influencers, if you are able to connect with them on social media or in person.
IMAGE SOURCE: Pexels.com