Yesterday you were filled with enthusiasm, excited about the idea of running your business, but that excitement was abruptly replaced by disappointment as your boat suddenly sinks to the bottom. What have you done to make your business take a nose dive? What should have been done to ensure business survival?
It is disheartening to discover that 8 out of 10 small business owners fail within the first 18 months according to a study conducted by Bloomberg. At an alarming rate of 80%, you cannot help but ask: What did I do or What did I not do?
Another study also discovered that only 50 percent of small businesses barely make it to the five-year mark and only one-third survive the tenth year of running their business.
According to Forbes, each month, more than 500,000 businesses are started. Unfortunately, many of them fail.
1. Poor Management
Putting up your own business is not a decision you make on the spur of the moment. It takes years of planning and analysing. Everyone can say they have what it takes to be a business owner, but once they are confronted by problems with cash flow, taxes and payroll, they choose flight over fight.
Business management encompasses a lot of things. You can be good at selling, but hey, there are still other business aspects you should not overlook such as hiring and managing employees, purchasing, production and more. Did you make the cut?
When you start your own business, educate yourself on skills you lack. Also, do not forget about your employees. Without them, you will not be able to accomplish your goals.
Employee engagement should not be ignored. Be mindful of the leaders you hire to manage your employees. Do they encourage productivity or are they the reason for employees’ lack of motivation?
2. No Strategic Planning
A business plan is critical to all businesses. Even if you are a seasoned entrepreneur, you are not going to be immune to problems. A business plan will help you analyse workforce needs, competition, budget, promotional activities and other business components. If you decide to expand your business, bankers will also request a business plan from you before you can secure additional capital.
3. Starting A Business For The Wrong Reasons
What is your primary reason for starting your own business? Is it making a lot of money? Pursuing your passion? Spending more time with your family? These are benefits you reap from being a business owner, but you might have failed to realise that it will take years of hard work before you can savor success. When starting your own business, you need to have the right reasons: love and passion for what you will be doing, drive and determination and ability to face failures.
4. Insufficient Operating Funds
You may have the passion and skill to become a successful business owner, but without sufficient capital, launching your business will be a big challenge. Although it takes a year or two for your business to finally take off, you should also take the costs of staying in business into consideration.
Self-made millionaires have a positive mindset, determination and drive to succeed. They also view mistakes as an opportunity to learn and grow. There is no secret sauce to becoming a successful business owner. If you think that failure is never an option, you will do whatever it takes to succeed.