9 in 10 small businesses fail, but why?

By Henry Brown

Although the figure is heavily debated, it is commonly believed that nine in ten small business startups fail within their first year. Although the figure may not necessarily be this high, it is high nonetheless, and this must be for a reason. Being aware of possible problems is one way of avoiding them, so be sure you become familiar with all of the common problems below.

Lack of passion

There are plenty of entrepreneurs who think they have a great product or idea and want to share it with the world. However, the fact of the matter is that there are also a lot that only care about making money, and simply don’t want to work under someone else to do so. Unfortunately, a lack of passion for your business will mean that, when times inevitably get tough, you would rather jump ship than stick it out and try to solve any problems.

Lack of responsibility

However, you could be the complete opposite of this. Rather than having too little passion, you may have heaps of it, so much, in fact, that you just want to jump straight in and get lost in all the excitement. However, this could mean that you forget to deal with important legal matters and financial issues surrounding starting your own business, which could end up causing it go under. Ensure you know everything legal you need to before jumping in head first. Equally important, be sure you have adequate funds on hand to get the business off the ground in a way that supports its long-term success.

Lack of teamwork

Whether you believe it or not, there is no way you are going to be able to deal with all aspects of running a business on your own. Lack of teamwork and an unwillingness to hire employees or take on a partner may cause you to spread yourself too thin, and this will only harm your business. You need people to help you out, whether this as employees or independent contractors. No one can do everything on their own.

Lack of backup plans

There is always the possibility that something will go wrong and you need to think fast to fix this issue before it causes bigger problems. Unexpected expenses, for example, could easily be paid for with merchant cash advances, but only if you do some research and find the best deals before a need arises. To be even more prepared, consider applying for a business credit card to ensure you always have cash to hand if you need it.

Lack of customer service

Although the customer may not always be right, being rude to them is never going to get you anywhere. Your business isn’t going to get very far if you don’t have great customer service, as you’ll get very little custom without it. Reward customer loyalty with special deals, discounts, and gifts to keep customers coming back again and again.

And there you have it, five common reasons why small businesses fail. If you want to make sure that your business is up and running and making a profit for years to come, you will want to avoid making any of these mistakes.

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Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.

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