Regarding entrepreneurship, the number of failing people is equivalent to that of successful ones. Statistics point out that up to 50% of startup companies fail within the first 5 years.
A true entrepreneur considers a business failure a milestone in his career path. He will learn from his mistakes and apply his experience to start a new company. However, why don’t you learn from other people’s failures and try to avoid them when building your own business?
In this article, we are going to reveal to you the top 10 reasons why a business is not succeeding, and popular mistakes entrepreneurs often make to their startups.
1. There is no specific plan
You should never believe in the myth that you can work well with everything in your mind. Always write down your business plans and follow them strictly. Noting down your strategies is the best way to make sure you understand how to turn your ideas into reality.
2. There is no or very little revenue
Even a non-profit organization must generate revenue (from donations) to compensate for operating costs. If your products are free, and you lose money for every purchase, it is very difficult for you to recompense for all expenses. If you do not have a solution, your start-up cannot last long.
3. There is no good market research
Not all good ideas can become a successful business model. Your thoughts are not always the fact. That you believe your service is great does not mean that everyone needs it. Apart from asking for information from your friends and relatives, you should conduct market researches carefully and skillfully. This way, you will know the social demand for your products or services and can determine the company’s scale and potential customers.
4. There is no determination
Young people may come up with million-dollar ideas, but they are worth nothing. The success of a company is depending on the implementation of a project or plan. If you lack determination and decision-making skills, you cannot fulfill your leadership role. As a consequence, your business will go down.
5. There is too much competitiveness
Having no competitors is worth warning, because there may be no market for your goods. However, if you can find out more than 10 opponents with a simple Google search, your area of interest may be quite crowded. Remember that sleeping giants can wake up and defeat you at any time. Therefore, never be subjective that they are too big and will never occupy your tiny market.
6. There are no intellectual properties
If you want to find good investors, you must have long-term competitiveness to fight against giants in your industry. You also need to register copyright, trademark, and patents as well as win non-public agreements to protect trading secrets. Intellectual property is the biggest factor investors use to value a company in its initial stage.
7. There are unskillful employees
Investors invest in people, not ideas. They often look for people with real-world experience in starting up or operating a new-established company. If this is the first time you build your own business, try to find a professional and skillful partner to help balance your passion and trading methods.
Moreover, be careful when hiring an employee. Your start-up does not need too many workers, but your agents must understand the company’s directions and be willing to go extra miles for common goals. The ones with poor working skills and attitudes should not be recruited to your team.
8. There is an underestimate in trading resources
Cash is certainly the main resource, but other factors such as relationships and access to marketing channels are also important. If you have a lot of money, but you do not know how to manage it effectively, it is as dangerous as you have a little. Remember to balance all trading resources and make use of them to develop your enterprise.
9. There is a poor marketing plan
You start a business without learning how meaningful marketing is, don’t you? It is one of the biggest mistakes you have ever made. Having an ingenious oral marketing strategy is not enough to make your products or services visible in the era of social media. Although a marketing plan is costly, you have to conduct it, because you will have no customers without creative marketing strategies. Hence, invest in PR and marketing in parallel with developing products to ensure your career success.
10. Give up early
One of the most common causes of failure in a newly-founded company is that the entrepreneur is fearful of taking risks and decides to dissolve the company in the early stage. When you open up a new brand, there will be a lot of challenges and even failures. If you are always determined and ready to face up with obstacles, you will be successful. On the other hand, if you give up, other people will make use of your ideas for their achievements.
Building a business has never been an easy task, even for wealthy people. On the way to success, you will have to suffer from many difficulties and barriers; you may fail and then recover yourself, but you cannot avoid inevitable hurt. What you should do is to observe and learn from the journey of surrounding people and successful ones to reduce potential risks.
It can be seen that both objective and subjective factors can lead to business downfall. To overcome these problems, it requires business owners a great entrepreneurial vision and strategic plans, apart from passion and energy. They should also be good at applying real-world experience to realizing their dreams and thoughts.
Besides the above-recommended reasons, your business will not be thriving if you lack well-defined development tactics and risk-prevention plans. The wrong measurement of the company scale is also the reason why your business is not succeeding. Knowing these matters, it is time for you to adjust your business approaches and learn more skills to well-operate your startup.