Starting a business is not that hard - but taking it to the next level and sustaining it, can be a challenge. Almost 85-90% of companies fail in the first five years, and the reasons for failure could be many.
If you are running a business or planning to start one, you have to stay aware of certain mistakes that could make or break your venture.
To help you do that, in this article, we discuss the top 8 reasons why your business may fail. By analysing the most common errors, you can take steps to avoid them and ensure your business’s long-term success.
If you want to learn how to run a 6 figure business, only a great idea won't be enough. You will need a fool proof strategy to make it happen - from ideation to execution, you have to set goals at each level and work towards achieving them.
Setting achievable milestones is as important as making a vision statement. Writing down your goals, objectives, and strategies will help you stay on track and measure your progress as well.
Start with small and achievable goals and slowly build your way up. Once you reach certain targets, it will be easier for you to identify the problems that hinder your growth and make necessary changes.
Customer satisfaction is the backbone of any business, but poor customer service can easily turn them away. If they feel like their queries aren’t being addressed or they are getting subpar quality products - chances are they will switch to a competitor.
Invest time in building relationships with customers, answering their questions, and providing them with top-notch products and services.
A good customer service policy is an effective way to show your clients that you are invested in their satisfaction. Show them that you care about their experience by addressing their concerns, offering refunds, and providing helpful solutions.
If you don't have an online presence, your business doesn't exist. At this point, there is no escape from the digital world - so if you are not making an effort to leverage the power of the internet, your business will suffer.
Getting a website, interacting with customers on social media platforms, and utilising other digital channels can open up new growth opportunities.
Setting up good SEO practices, creating content regularly, and engaging with customers on digital media will help you build an online presence.
Make sure your website looks attractive and is easy to navigate. If you are not tech-savvy, hire a professional web designer who can create a stunning website for you.
One of the biggest mistakes most entrepreneurs make is not having a separate business account.
Mixing business and personal funds can lead to confusion and mismanagement of money. You must have a dedicated bank account for your business transactions.
It will be easier for you to track the inflow and outflow of money, given that you know what’s coming in and what’s going out.
Additionally, having a separate business account will also help you save money on taxes. You can claim tax deductions for any expense related to your business that was done through your business account.
No matter how great your product or service is, there are bound to be competitors in the market. You can’t ignore them, especially when they are trying to outdo you or take away your market share.
Setting up good SEO practices, creating content regularly, and engaging with customers on digital media will help you build an online presence.
Competitor analysis is the key to staying ahead of the game. Keep an eye on your rivals - what they’re offering, how they’re pricing it, and where they are getting their business from.
Analysing your competition can help you identify areas where you can improve and stay ahead of them. You won't be able to overlook their strategies and come up with better ones unless you know what they’re doing.
Stay informed about your competitors' latest moves, so that you can be one step ahead of them. Keeping track of the ever-changing market trends is also important for staying competitive.
Yes, it can be stressful to manage a business, especially if you are just starting. But if you don’t have a positive outlook toward your venture, you won’t be able to grow and succeed.
Having a negative attitude will only fuel your stress and stop you from reaching your goals. So instead of worrying about the future or over-analysing every little thing, focus on staying positive.
Look at the positives of becoming an entrepreneur - from learning new things to having more control over your time and resources. With a positive mindset, you can stay motivated and take proactive steps toward achieving success.
Yes, you will be facing one or two failures but don't let that be a hindrance - keep at it and you will eventually succeed!
Having a good business credit score is essential if you want to get a loan from banks or other financial institutions. Your credit score is the measure of your business’s financial health and lenders use it to assess your ability to repay loans.
Check your small business’s current credit score and look for ways to improve it. Things like timely payments of invoices, obtaining small loans and paying them off quickly, and interacting with creditors can help you build a positive credit score.
By improving your credit score, you will be able to get access to better financing options. This way, you won’t have to turn down lucrative opportunities due to a lack of funds.
Whether it's from customers or employees, feedback is a valuable source of information for business owners. It can help you identify areas in which your business can be improved, and how to increase customer satisfaction.
So don’t ignore feedback from your customers or employees - take it seriously. Listen to their opinions and provide solutions that will make them happy.
You should also have a system in place where you regularly solicit feedback from your customers or employees. This way, you can stay on top of their needs and expectations, ensuring that you are providing the best experience possible.
So, there you have it! These are the top 8 mistakes most entrepreneurs make when starting a business. Avoiding these mistakes can help you set your venture up for success and ensure that it lasts for the long haul. It won't be easy - but with hard work and dedication, you can certainly make your business a success. Good luck!
Ade Omosanya is a father of one, a UK Chartered Certified Accountant and owner of AO Accountants Ltd. He has a keen eye for all things finances and shares his thoughts and tips via the My Future Pound blog.
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