In less than a year and a half, 80% of new business owners will watch their money and dreams go down the drain. It’s a sad reality–not meant to discourage your journey as a business owner but a viable way to learn from others mistakes. Though each circumstance may be different, there tend to be surrounding malpractices that all lead to disaster. We are sharing these 5 reasons 80% of businesses fail within a year so that your business doesn’t have to be another failing business or unfortunate statistic.
Picking a Partner
Started from the bottom now we…bankrupt.
There really is nothing like growing a business and making bank with your best friend from middle school, but choosing a business partner based on your personal relationship is sticky territory. Look for credentials in your partner that really add value to your company. Experience starting, growing, and operating a business is where you want to start with your partner candidates.
Ignoring Copy Cats
Patent your products! I’m actually holding a megaphone as I say this because it’s SO important. It costs a little coin but nothing will cost you like finding out a competitor has ripped off your idea and is selling it 70% cheaper than you are.
Even though you may be in the beginning stages of your business, it’s important to create margins for your product and services that are sustainable.
Many people want to practically give their business away just to get people in the door. With a well-developed business plan surrounding a product or service that solves a real problem-people will pay. Stop giving away your margin, you’ll only devalue your business long-term.
Forget Your Customers
Passion can kill any smart entrepreneur.
If your passion has you believe so much in your business that you ignore your feedback, you’ll be your only customer. Social media marketing his highly integrated into modern business plans because it makes for a two-way discussion. Instead of ads talk at people they now encourage conversation.
You mean we customer will tell us how to improve and even buy from us? Yes. Yes, they will. Updating your marketing techniques will help you know where to find your target audience and exactly how to reach them.
Skip Professional Advice
I’m glad you’ve got an MBA and your dad’s an accountant but there are SO many aspects of a business that are critical to its success. These aspects require personal attention. From marketing to the books, to inventory management- the list goes on and on. As a smart business owner, its necessary to not only hire and delegate but seek advice from professionals. This should be done on a quarterly basis while your company is in its early stages. Professionals can help spot red flags that could help rescue a failing business.
On the bright side, a lot of failed businesses come back twice as smart. So if you must–fail fast then get back at. Otherwise, pay close attention to the 5 reasons 80% of businesses fail within a year so that you won’t.