Real-life experiences can almost always represent the reasons why small businesses fail.
A British artist, while dying on his hospital bed, whispered, "Dying is easy, being funny is difficult." That was the artist's dying joke, but watching a small business die is never easy. And it doesn't matter what the cause is, but it's never a joke.
Below are real-life experiences that most likely represent the reasons why small businesses fail.
1. Lack of capital. Money is not only the root of all evil, but it is also the cause of small business failure. Many small business owners underestimate or underestimate how much money they will need, not only to operate and grow the business, but also to maintain it as the company struggles to gain a foothold. sure in the marketplace. Professor Norman Scarborough of the University of Business Administration in South Carolina said: "Once you start lacking capital, it can start a downward spiral, and from there you can never go up again."
2. Poor cash flow. This is the terrible cousin of inappropriate capital. Even businesses that have gone through the embryonic stage often collapse when monetary income at least cannot compensate for costs and other expenses. And of course when you're about to go bankrupt, money is needed first."
3. Making inappropriate plans. No one is surprised because this is a problem that has the same causes as lack of capital and poor cash flow. It's important that you draw up as comprehensive a business plan as possible, to cover finances, marketing, growth and a list of other factors. It may indeed take a long time, but when a plan is well prepared, it can take weeks or months to complete. However, that is the time to discover an idea that you realize has no effect, but if you do not have a plan and still move forward, then you can definitely end up in pain. hearts and thousands of dollars disappeared into thin air.
4. A competitive advantage. Uniquely honest ideas are as rare as the honesty of today's CEOs, but it's still important for your business to gain an advantage in whatever niche you have. exploitable. It will be a slightly different product or have consumer support that has surpassed your competitors, marking that there is a factor that has placed your business simply behind activities that are essentially just copying another product, often with simpler features and a lower price, has become a business that must "have something unique and different".
5. Poor marketing. Your relatives know you well, but what about your future consumers? And it's essential to develop a marketing strategy, not only to identify who might buy from you, but also why. Make sure your marketing strategy sets you apart so a customer can clearly see why they would go to you rather than a competitor.
6. Not soft enough. Holding huge amounts of money to battalions of seasonal workers, every small business owner knows the advantages of a larger competitor playing this game. Indeed, but one thing he cannot necessarily do is not depend on a single dollar, which is something small businesses can exploit.
Never forget softness. If a product isn't quite right or a marketing campaign isn't really flying, there's no need to fear that you haven't done a good job. Doing those things requires adjustments along the way and is much more difficult to control than other things.
7. Don't try to do it all. Business owners are smart and very resourceful, but running a small business always has a hidden element. Don't try to do everything for your business. If you shy away from the idea that you need to maintain complete books, then don't hesitate to hire a good accountant. When a legal issue suddenly emerges, one should not rely on highly educated jurists to assess the legal ramifications. Establish a long-term relationship, preferably with an attorney sensitive to small businesses.
8. Good boss, bad employees. An enthusiastic owner who understands business issues can often be demoted or neutralized by inexperienced and aimless employees. Therefore, it is necessary to have people who are well-trained, well-paid and somewhat share your business thinking.
9. Uncontrolled growth. It seems like a joke, but a small business that is simply successful too quickly often pushes itself into an early death path. If your production can't keep up with demand or if a necessary expansion coincides with insufficient funds, the growth you dream of could actually threaten the very existence of your business. Karma. Again, as long as growth is visible in your initial plan and tracking it appropriately, you are never in danger of not being able to control the situation.
