10 reasons why small businesses fail
No one wants to think of failure when they start a business but as per the statistics published by the Small Business Administration (SBA), seven out of ten new employer establishments survive at least two years and 51 percent survive at least five years.
So knowing the aspects that make a business fail can help us prevent them for our own business or do something about them.
So here 10 reasons why small businesses fail:
Lack of clear objectives.
It’s important to know why you are in business and if you are for the right reasons. Also the business owner needs to know what they want to achieve in measurable objectives so with this clarity can create a plan for achieving them.
Inexperience in managing a business.
Not all people that want or establish a business necessarily know the technicalities necessary to manage this business. These are skills that can be learnt and involve planning, organizing, executing and monitoring many aspects of the business which mainly include: * marketing * finances * human resources * administrative tasks.
Establishing and maintain a business requires the availability of funds as all aspects of management require a certain cash flow to run effectively – especially in the beginning when we are in the process of finding clients / customers and start earning from this business.
Not having an effective marketing plan.
Not knowing how and where to find new clients or customers and what and when we need to do to attract them to what you have to offer will have us fall on overwhelm and despair. Creating a marketing plan will not only take a not of stress away and save valuable time on the long run, it will put us on the driver’s mode who knows where he is going and why. This will also stop us from acting spasmodically and reacting occasionally.
Unable to understand your market.
The business owner needs to know and be clear as to who their target market is, what is their profile and what are their needs. Not knowing this, it is possible we are offering the wrong thing to the wrong people.
Unable to communicate what you are selling.
This usually happens if we are not clear in our mind as to what we are selling and we have not been able to verbalise it in a way that it is clearly understood by the target market. Unable to do that will stop us from attracting our ideal clients. Finding and communicating our Unique Selling Proposition is vital for business success. When in business unfortunately we do need to sell so we need to know how to do it effectively so we can “close the sale”. If we have issues with selling then we might not be cut for business.
Poor customer service.
Sometimes we forget that the client / customer is not only for a one off sale. Putting customer first, listening to their feedback and responding accordingly, remembering them and communicating with time often, adding value to them before and after the sale, are things we often forget but are important to develop and maintain trust and repeat business.
Poor employee relations.
There are many small business owners who are solo-preneurs, but often a business requires employees. If we are unclear or they are unclear as to what exactly their role is, what they are suppose to be doing, putting clear boundaries and at the same time care for them, listen to them and communicate with them often, these aspects can be a downfall of a business. A business requires a successfully co-ordinated team work and this goes even for those sole traders, as they to need the support of others like accountant, web agent, admin person etc.
Lack of online presence.
Now-a-days every one is searching to find products and services online. If we do not have an online presence – at least a website – it will be very hard for others to find us. Not only we need a website but a website that can rank high in searches, it’s easy to navigate and can retain new leads and potential clients.
Maintain a positive, success mindset.
We can do all the technical parts of the business correctly, but if these are not backed with the right mindset that just not block your progress and moving forward, then nothing will work out. There are a great number of limiting beliefs in connection to the way we feel about ourselves, the way we feel about selling, the way we feel about money that can act as barriers that keep us stuck. We need eliminate these limiting beliefs and develop the confidence and a mindset of success that will carry us to achieving a successful business.
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Konstadina Sadoriniou is an internationally renown coach, mentor, trainer, speaker and author in the field of personal and professional development with an experience spanning more than 2 decades. She is the founder of the Positive Change Academy which aims to assist conscious entrepreneurs transform their business in a way that they can attract more clients, more success and more profits; learn ways to cope with the changes; reach their full potential and evolve by walking the path of continuous progress. To receive her empowering guide “104 ways to re-claim & hold your personal power” as well as her content rich e-zine, subscribe today at www.positivechangeacademy.com