Nobody wishes to start a business and expect such business to fail while others are succeeding. Setting up a business enterprise requires a thorough planning and financing.
Establishing a business is a risk on it own, however, sometimes some business fails because the entrepreneur is caught unaware or fail to put some checks and balances in place.
In Europe, USA precisely, business failure is nearly 20%–18.4% within the first year according to Lending tree analysis; In Africa, according to The Business Day, 80% of Small and Medium Scale Entreprises(SMSE) fails in the first 5years.
Business fails for different reasons, the common reasons are highlighted below;
1. Inadequate Planning
Planning has been one of the major causes of business failure in Nigeria. Most businessmen and women plans for short-term goals without planning for long-term goals. Your plan should be where your business will be in the next few months or years.
If you be fail to plan properly for your business at be beginning, then you are planning to fail big time in the business process.
It is not about having a plan, it’s all about executing the plan, which is planning.
2. Turning A Blind Eye To Customers Need
Most business will tell you that the customer is the number one, but only few act in that way.
The reason why you are in business is to provide maximum satisfaction to your customers, so you need to know the needs of your customer, hear their reviews and ask if they want new features or after sales services, etc
The best way to go is to hear negative reviews from customers and try to improve where necessary.
Remember, you are not in business to sell what you want, you are in business to sell what customers’ want.
3. Not Learning From Failures
At the early stage of your business, it is not a crime to fail, in fact, you may fail countless times, but your success is not in failing, your success will be determined by how many times you rise when you failed.
Most entrepreneurs are oblivious about their mistakes and mistakes of others. If you want your business you grow, get a diary, write out your mistakes and the mistakes of other business, use them as a guide so as not to repeat itself.
4. Poor Management
Everybody wants to be CEO whether there is a standard or not. To manage a business properly, you must not work without a standard or a system in place.
5. Inadequate Capital
This has been one of the major reason why business fails, while others succeed. Inadequate Capital makes it difficult for business to grow and may cause more harm than good if you are unable to pay loans, bills, loan, etc
It is always advisable not to start a business with a loan. Make sure you have enough savings before going into business, you can borrow loans thereafter.
You won’t have to collect big loans once you have savings. Your saving will surely save you from getting higher loans.
6. Bad Location
Your location will determine whether you will make more sales or loss.
When starting a business, location is a very important thing to take note, a bad location will make it impossible for you to reach your customers.
If you are planning to be selling proteins like frozen turkeys and chicken, your location needs to be in market side or busy areas. If you are planning to be selling books, your location needs to be close to schools or area where students usually walk-by.
7. Poor Financial Management
Your business must keep proper book of record and all financial book of records must be used and properly kept. A business without proper accounting is like going to school without having a result or report card, you won’t know the stand of your business.
Maintaining a proper books of account helps you to know where you are— whether you are making profit or not. It also helps you know places you need to make necessary amendment or corrections and you will be able to make proper decision for your business growth.
8. Focus & Determination
Business is full of ups and downs, profit and loss; you must be focused and determined in everything you do because sometimes you may not get what you don’t expect and all you have to do is remain focused and move on.
9. Making Use Of Business Money For Personal Use
Business is business, you must treat your business like business. Your business account is not your personal account where you can withdraw money anyhow and anytime for personal use.
Money for business should be used strictly for business, nothing more.
10. Wrong Business Partner
It is easy to succeed in business if you have the right partner, at the same time, it is easy to fail in business if you have the wrong partner.
Before you chose your business team, make proper findings and research about whom you are choosing to do business with you especially if it is a partnership business.
The wrong partner can destroy your company easily, also, chosing the right partner can easily make you succeed in business.
11. Carry Customers Along in Product Development
Most business fail because they build product based on assumptions. The product/services you are offering is for customers and not you.
If you want to be successful in your business build your product alongside with your customers.
12. Market It The Possible Way
You may have the best product, but if you don’t do necessary marketing especially digital marketing, you may be left out.
For people to know what you are doing you need to advertise your product online day-in-day-out.
A business without advertisement is like winking a girl in the dark, you only know what you are doing, no one else.
13. No Proper Market Research
Most people go into business without making research on what they plan to do in business.
Customers want advancement, development and new ways of doing things.
You need to go out, carryout surveys, check out the weaknesses of other people’s product/services within the same line of business, do necessary amendment while doing yours and create/offer yours product/service in a dynamic way.
14. Write Down Your Goals, Keep Improving
You need to write down your long-term goals and check them everyday.
Once you do this, you can see what you have achieved, what you are yet to achieve, things to improve on, what you need to keep doing and what you need to stop doing.
15. Don’t Looks At Your Business Idea, Take Action
Some business persons fails to succeed because they look at their business ideas only without taking actions.
Most times, they are afraid of failing. It is not about you failing, its about rising everytime you fall.
Having a good business idea is not enough, you need to take actions and stop complaining.
Entrepreneurs don’t talk much or complain, they take action. Be an action taker not an idea talker.
16. Believe in Yourself
Whatever will be, will be if you want it to be. Setting up a business successfully is not like a miracle, you need to believe in yourself no matter the challenges.
You can make it happen once you believe in yourself.
17. Reach Out To Mentors, Connect & Network
Sometimes you can’t do it alone. Learn from people that have made it in you area of specialization. Network and make connections so that you can grow.
Having successful people around you helps you hear and know that is takes to be an entrepreneur.
18. Minimize Risk
In business, risk taking is inevitable. They are 2 types of risk, certainty risk and uncertainty risk. Risk is unavoidable, minimize the risk you are taking and ensure its certainty risk, that is risk that has the tendency of bringing positive result.
19. Give It Time
Some people fail in business because they expected huge profit in the first year of business. Fine, the main reason why you are in business is to maximize profit but, it is worthy to know that Rome is not built in a day. It takes time for people to know you and trust you in business. Everything you do in business may take longer than than expected. Therefore, chill, relax and grow your business gradually.
20. Prepare To Fail, Ready To Stand
This may sounds funny. Like i said earlier, it is never a crime to fail. You can fail many times but giving up is not an option. Sometimes you may need to fail go get things right properly. Expect failure at any stage of your business but don’t accommodate it.
21. Focus & Listen To Your Customer
Your customers are the main reason why you are in business, always listen to them to improve on your product and services, don’t ignore them.
The customers can fire you anytime by spending their money somewhere else. Know their likes and dislike and improve on negative feedbacks.
Pls note if you want to success in business, you must know how to deal with the unexpected when it happens. Some business fails while some succeed. To succeed in business, doesn’t mean you won’t fail, it means you are a winner, and winners never quit no matter the volume of the problem.
