Five Reason Why 75% Of Businesses Fail
October 23, 2017
According to Startuptipsdaily 75% of businesses don't make it to their 10 years anniversary and according to Forbes approximately 543,000 new businesses get started each month in the U.S. So I decided to ask myself this particular question, why do businesses fail?
I thought of few reasons and also tried to gather some through my research on businesses that have failed in the recent years, I was able to compile a list of 5 persistent reasons why businesses fail and if you are a business owner or you are just planning to take up the challenge you can learn from the failed businesses.
Lack of focus
The first reason am going to talk about is lack of focus or specialization or they are just trying to expand their business really fast. Many businesses have failed due to the fact that they want to concentrate on so many things at once. Apple started by just producing computers alone, they were focused on just producing a single product. Google also started as just a search engine. All big companies out there all started small, so if you are going to learn from the successful businesses you have to start small. Growing slowly but steadily is always profitable for accelerating from zero to 100.
Inability To Standout
You should be well aware that any business you want to start now there is surely a strong competitor out there.So what is going to make your own business stand out? You have to have a clearly defined Unique Value proposition. UVP is a clear statement that describes the benefit of your business, how you solve your customer’s needs and what distinguishes you from the competition. Businesses fail because they blend into the background, there is nothing creating an exponential buzz about them.
Bad Customer Experience
Your business will run soon go into extinction if you have a bad customer relationship. Business that are able to successfully implement a customer experience strategy achieve higher customer satisfaction, increased revenue and reduces churn rate. A statistic from American Express proved that 60% of customers are willing to pay more for a better customer experience. If a satisfying customer experience will retain 60% of your customers and keep your business alive, so why not make it a priority.
Lack of Reserve capital
Not all businesses make profit in the first year. Get me right I said profit, not revenue. Technically, when your revenue exceeds your expenses, you are making a profit. So you should be prepared for the worst, make sure you have enough capital before starting a business. Draft all your expenses for the first year and be sure you have enough capital to cater for them. As a small business, you should also not overspend, be wise when spending.
No Proper Marketing Plan
To me this the most important of all, maybe because am a marketer, you might have actually gotten over the previously discussed issue but no business will succeed without the right marketing plan. The main reason for setting up your business is to make money, sell your products and services to some people.Ok, do you have the right plan for this? Do you know who is going to buy from you? How you can reach them and how to persuade them to buy. Have a good marketing plan before starting your business.
CONCLUSION
Before you also start any business you should try and acquire enough skills needed for day to day running of the business. Always ask for help when needed, don’t be too proud to seek advice and networking is also an important gem for your business survival, In my recent discussion with someone he said “my business failed because I don’t know how to network, if am going to start another business the first thing I will do is to hire a communication expert to handle all external communication”.
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