When you first start a business, you probably have visions of grandeur, and you should. You are undertaking a new and exciting adventure, and are about to follow your dreams! However, before you get lost in excitement, it’s important to do your research and know why most businesses fail within their first two years of business. In fact, did you know that according to Bloomberg, 8 out of 10 businesses fail within their first 18 months of business? A 20% success rate doesn’t equal great odds, but if you can keep your wits about you and understand some of the top reasons why businesses fail, you have a shot at being on of the businesses that stays afloat. According to Forbes, here are just 5 of the top reasons why businesses fail.
They Don’t Know What Customers Really Want
Your customers really hold the key to whether or not your business will be successful, and so it’s important to listen to them, and find out what they want. If you continue to push through with ideas that you like, but your customers don’t, it’s a sure-fire fail. To find out what your customers want, make sure to maintain a dialogue with them as you conduct business.
Your Business Is Not Different Enough
Another reason why businesses fail is they offer little in terms of differentiation. If you offer the same products and services that someone else has spent years offering and spent years developing their business, it’s unlikely that you will come and take the ranks in the industry. In order to break-through, you need to offer something that is just different enough to make you more appealing.
You Don’t Communicate Your Message Well
In order for your business to succeed you need to learn how to communicate your value propositions articulately. If this is something you struggle with, hire on marketing and PR experts to help you. It is worth it in the end to make sure that you are getting your message out there clearly.
Your Leadership Structure Is Shaky
One of the best ways to fail at business is to have problems within your leadership structure. Remember that you are the business owner, which means you are the number one leader of the company. You are in charge of making sure everyone does his or her job and that they do the job well. If they don’t do their jobs, then you have every right to get rid of them, and hire someone who is more eager and more on board with what you are trying to accomplish. Before you get in too deep, make sure you have the right team of leaders.
Inability To Become Profitable
And, the ever-pressing question in business is always “how do I become profitable, is it not?” Without knowing how to turn a profit with proven revenue streams, it really is impossible to make it in business. Unfortunately, this is a trick that is much easier said than done, and there is no one size fits all solution. Some of the best advice, however, is to make sure you have enough start up capital to make your business profitable and also to experiment. If something isn’t working, don’t be afraid to change directions until you find something that does work.
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