The most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives. Here are the other main reasons:
1. You start your business for the wrong reasons
2. Poor Management
3. Insufficient Capital
4. The Wrong Location
5. Lack of Planning
6. Over expansion
7. No Website and No Social Media Presence
You need to stretch for as long as possible before investing in new staff or other items. It may mean working ridiculous hours for a little while. But in the long run it will mean your business will continue to thrive.
Here’s what I mean: As your business launches and grows, there will be a push and pull between funding and supporting that growth, and being conservative with your spending. When in doubt, stay conservative. The “lean and mean” start-up headset – and the concept of a minimum viable budget - is your friend.
In life, you may have forgiving friends and relatives, but entrepreneurship is rarely forgiving. Eventually, everything shows up in the soup. If people don’t like the soup, employees stop working for you, and customers stop doing business with you. And that is why businesses fail. People start businesses because they want to do a particular thing or love a particular product. I don't know how to put this any more strongly; it's not about you, it's about them - your potential customers.
Opening a small business is a big endeavour, and the old adage is true: if you fail to plan, you plan to fail. While a plan for your business is key, planning for how your business will fit into your life, and planning to approach every challenge (and failure) as a learning opportunity are both equally as important as a general business plan. SO… be realistic about what you are trying to achieve, and never ever say “no” to help. Just park your ego at the door when you clock in, and put it back on when you lock the door for the night, and turn off the light switch.
What do you need to do to make sure your small business continues to grow and provides you with the lifestyle you want? For me it’s Number 5 above as the big ticket item. Planning and having a view of what and how you are going to make a success of your business will help protect that all important cash flow. So take the time to review what you’re doing and tick off you answers to the seven factors above and make sure you negate those things that kill small businesses!