Many people have had the idea of going into business for themselves. However, many people don’t go into business for themselves. A leading cause of this may be the fear of failure. The fear that their business will fail. That’s why in this article we’re looking at The 7 Reasons Why Businesses Fail.
WHAT IS FAILURE IN BUSINESS?
Constantly we hear that most businesses will fail or that most businesses fail within the first year. That’s because they’re supposed to. You’re supposed to fail in business. That’s how you learn. Failure is part of success. You can’t have success in business without failure, first.
Therefore, stop looking at not succeeding as a failure. Take not succeeding, that is, failure, as a lesson.
WHEN WILL YOUR BUSINESS SUCCEED?
Most people rarely, if ever, succeed their first time in business. Many times success doesn’t come until multiple tries. Therefore keep trying and don’t give up because it didn’t work out one time or the first couple times.
THE 7 REASONS WHY BUSINESSES FAIL
1) PEOPLE GIVE UP TOO SOON
That’s right, most businesses are going to fail because people are going to give up too soon. The entrepreneur will get excited about the idea, get it going and if it doesn’t happen right away, call it quits.
Your business will work, but you have to give it time. Your competitors aren’t going to idly sit by and let you take over the market. Your potential customers may not even know who you are as of yet. You still have to hone in on your marketing strategy.
The moral of the lesson is don’t be in such a rush to succeed. It’s going to take time. However, don’t give up in the meantime.
2) LACK OF BRAINS
This one is straight from the Shark Tank master himself, Mark Cuban. He says, “Businesses don’t fail because of lack of money. Businesses fail because of a lack of brains.”
In other words, businesses are failing because the people who are in charge are simply not making smart decisions. It’s very important that you make smart decisions for your business. And one of the smartest decisions you can make for your business is to make sure that you’re not the smartest or the only smart person in the room.
The success of your business depends on the smarts of those that run it. Your business doesn’t decide for itself. The people that run it do. Therefore be sure that those people are smart people and that they make smart decisions.
3) CUSTOMER ACQUISITION COSTS
Customer acquisition costs a major contributing factor as to why businesses fail. In simple terms, businesses can’t keep up with the costs of acquiring new customers. Their marketing costs are excessive.
Whether it’s a television ad or a social media campaign the costs to acquire customers are not resulting in sales/income to support the ads.
4) NOT HIRING THE RIGHT PEOPLE
If your business is going to succeed, you’re going to have to hire the right people. You need to develop a system for vetting people. You can’t simply hire anybody because they want to work for your company.
You have to develop a system of finding people who are passionate about the products/services that your company offers. You need to hire people that believe in the product/services that your company offers. If your people don’t believe in it then they’ll be faking it. And eventually your customers will catch on to that. If your people don’t believe in their product/services, why should your customers? Hire the right people!
5) YOU HAVE TO PUT CUSTOMERS FIRST
Putting your customers first is the holy grail to success in business. Afterall, without customers, you’re not in business. However, many companies will fail because they put profits and prioritize other things before customers. Don’t make that mistake with your business.
Put your customers first. Prioritize them and never stop pursuing ways to improve your customer service and customer relations. Do this via surveys, questionnaires, etc. Many companies offer discounts and promo codes to encourage customers to participate in them.
6) LACK OF LONG TERM PERSPECTIVE
Many companies will fail because they never had a long term perspective. They only saw the short term. A company that only focuses on the short term will only last a short term.
You need to have a vision for your business. A short term vision and a long term vision. You need to know what your plans are for the next 6 to 12 months and what they are for the next 3 to 5 years. Don’t play the guessing game. Your competitors are not.
7) NO WEBSITE AND NO SOCIAL MEDIA PRESENCE
No matter the industry that you’re in, how big or small your business is, your business can’t be without a website and social media presence. Having a website and social media presence is imperative to the success of your business.
In today’s day and age, your customers and potential customers want to know about you, get in touch with you, research you, in a moment’s notice. Without a digital presence, you will be left behind because they will just go to your competitors website or social media.
Be sure to not get left behind in the digital age. Make sure your business has a website and is present in the relative social media platforms.
And as always we like to close with a saying, quote or adage and today’s is from Mark Cuban (video below): A SUCCESSFUL BUSINESS DOESN’T JUST COME TO YOU.
Now, go forth and change the game!