A research done earlier by the small business administration shows that new businesses survive for five years while very few (approx. one third) are able to progress up to 10 years. Forbes went ahead and gave another statistic that out of 10 businesses started eight fail within a period of 18 months. Here is a list of some of the reasons why small businesses are failing are failing every day. If you note any that’s affecting your business you can make positive changes and boost your business to success.
- Poor leadership skills
Businesses fail due to poor management skills. With small businesses it’s not easy to afford specialized personnel that are qualified and experienced in management decision making and supervisors. Mostly for small businesses you are everything and sometimes you might not be qualified to do it all. Sometimes the problems you might experience in the business many be hard to resolve thus leading to business failure over time.
- Lack of uniqueness
Most businesses began is copied ideas. People lack new ideas and tend to explore ideas that are already in place. This brings along a lot of completion and division of customer. According to one of Donald trump’s book that I read last year he states that coming up with a totally new invention can be very hard. He goes ahead and explains that you can use an old idea and make it seem new by considering all the downfalls and finding solutions to them.
- Poor financial management
New entrepreneurs may lack good financial management skills. Some lack the skills to manage their expenses, cash flow, taxes and any other finance related issues. Lack of accountability skills could make your business to run at a loss. You can download professional accounting software to guide you and ensure all records are kept.
- Inability to attract more customers
As the business begins the demand for the product will be high. As time goes by the sales might reduce due to different factors such as better products coming up. The lack of new ways to attract more buyers could lead to a business failure
- Work overload
Sometimes the work could be too much for one person to deal with. Even after employing a helper it’s hard to operate your business and train them. This can make one to neglect a few issues in the business which in the long run could lead to failure.
- Fast growth
Every entrepreneur wants their business to grow and expand faster. This sounds like a good thing, but it’s only good if you are prepared for it. Sometimes it can grow faster than you. For instance, you can open a business and the orders made through online platforms are more than what is in stock. If you don’t have the finances to deliver it could lead to failure
Fear is an enemy of progress, especially if it will influence you not to pursue a challenge or obstacle. Different kinds of fear such as the risk of investing more could lead to a major failure in the business.