It’s an all too common sight. A new business opens up in your neighborhood, and a few months later, the doors close permanently. Ever wonder what happened to make that brand new enterprise go out of business? There are many reasons a business will fail, but here are 4 of the most common.
1. Extravagant Startup
You don’t need a big showroom, lavish decor, or the latest in high-tech gadgetry to open your doors to the buying public. You can start out as small as necessary and still prosper. Sure, your customers would admire a gorgeous building (website), and it might inspire confidence in your product or service, but if you can’t afford such a luxurious startup, you had better steer clear for the sake of the financial health of your business. If you are starting an Internet business, the same rule applies. You don’t have to start out with the fanciest website, but don’t skimp on good design. Provide a user-friendly interface that’s easy to use and will not cause potential customers to click away from your site in frustration.
2. Too Much Diversity
No business can be everything to everybody, especially in the beginning. If you incorporate too much diversity in your business startup, the chances are that the quality of your products will suffer as a result. It is a much better plan to concentrate your efforts on a few quality products or services rather than a bewildering array.
As time goes by and your business expands, you will be able to judge the public’s response more accurately and offer more options to your customers. For example, if you opened a computer repair shop in your neighborhood and a good proportion of your customers asked about getting their cell phones fixed as well, you could consider adding that service to your repertoire with the knowledge that a profitable market exists.
3. Little or No Research
It’s imperative you do your research! Whether it’s for your business plan, the choice of location, or sourcing lower prices on merchandise, the future financial health of your business heavily depend upon this one factor.Another crucial area that some entrepreneurs fail to research in the beginning is marketing. A new company needs to announce their existence to the community. Market research and planning is the key element that will bring in future customers for your business and should never be neglected. It’s not necessary to spend a lot of money on marketing. Doing one’s research can yield affordable options for the new entrepreneur. Also, networking with other business owners can help spark your imagination with new ways to market your new business to bring in the customers.
4. Managing the New Stress Load
Starting a new business can generate a tremendous amount of new stress as well. It’s vital that you and your loved ones find ways to manage the inevitable pressures and frustrations created by your new venture. Guard against becoming a workaholic and be sure to allow time for adequate rest and relaxation to avoid emotional as well as physical problems.
It’s good to have a solid plan in place before starting the business. With as much as possible planned out in advance, there will be less chance for disagreements, arguments, or unpleasant delays or problems to cause stress and anxiety for you and your loved ones. More planning means a smoother startup and better chances for success for your business.
“Remember, wealth has nothing to do with money, success has everything to do with failure, and life is as simple as you make it!” – John Dessauer