A lot of people want to be an entrepreneur and decided to start their own business. Every year, there would always be new businesses starting up because now, the trend is to be your own boss. Some turned out to be a huge success and the others? Failed. Why is that?
There are so many reasons why they failed, but let’s look at the common reasons of how some small businesses ended.
Ineffective Planning
Planning is an important key to everything. It does not have to be with starting up a business for you to come out with a thorough plan. And in the business industry, planning who, when, and where is not enough. Financial plans, marketing, products/services, sales, etc., should all be included.
It needs to have all kinds of strategies to move to a certain vision, mission, and objective/goal. Having a plan would also define the unique value proposition of your business. So, if a business has an ineffective plan or no plan to follow, the chances of a successful business are very low.
Leadership Failure
If you are starting up the business and are leading the whole thing, you should know what the good qualities of being a leader are. If you are a leader but have such a poor attitude, like not listening to other's opinions, demotivating, over-confidence, etc., people will turn away from you.
Because no one would want to work with someone that is only bossing them around and take zero care of how one might be feeling. It takes and requires a lot of experience to be able to shape yourself into a great leader. Some good characteristics of a leader are being empathetic, self-aware, ethical, and able to communicate well.
Insufficient Management
Managing your business is more about the mindset and the attitude. It could make groups of employees being more effective and working a lot more cooperatively to achieve the goal. If the business is having a gloomy or dull atmosphere, employees would feel demotivated and makes no effort in doing a good job for the business.
When an employee doesn't do a very good job, others shouldn't put too much pressure on that employee and should instead help to make better work in the future. Or when an employee did a wonderful job, others should give that employee recognition because it's in the human's need to be able to be recognized. Sometimes, not all the things we plan will go the way we want, especially for new businesses that have already visioned a bigger picture.
Lack Of Financial Management
When running a business, you must know where the money is coming from in your business and where it'll go. It's important to keep track of the records to keep the data real. Managing finance should also make a contingency funding plan for events of the crisis.
If you are not good with numbers or have no interest in managing how cash flows, expenses, or taxes, it is better to hire a professional accountant/financer. Or else it will be one of the many reasons for a failure path.
Ignoring Customer’s Needs
Ignoring only your customer’s needs only means that you want your business to fail and not want to improve it into something better when you have the chance to. When a customer gives a negative review of the products/services of yours of an opinion of theirs, it should not be taken lightly.
You need to find out why they are not satisfied with what they receive and try to fix it as fast as possible. It's not only about the negative reviews but also keeping up with the trend values of your customers. Are they still loving the products/services of yours? Or not?