What Makes a Business Fail And How to Prevent it!

I believe the number one reason why a business will fail is lack of planning.

This can be due to various reasons, perhaps because the market research wasn't sufficiently carried out in the first place, or because the financial burden was higher than was planned for etc.

Sometimes business failure happens because the business owner is not very savvy at other aspects of the business, such as management, promotion, branding, advertising, public relations, leadership, bookkeeping, or customer follow-up etc. It is important to get the necessary training to ensure all aspects of your home business run efficiently, or to hire help to manage these other aspects.

Here are some other reasons to consider:

 

1. Inadequate accounting records

 

2. Disregarding or misinterpreting financial records

 

3. Not controlling costs

 

4. Fraud due to poor internal control

 

5. Pricing goods or services too low as a way of getting customers or clients

 

6. Lack of marketing/selling skills

 

7. Not carrying adequate and appropriate insurance

 

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8. Failing to adequately train and develop employees

 

9. Lack of goal and business advancement planning

 

10. Not seeking advice or professional help when necessary.

If you know that most businesses fail because they don't bother to plan properly, what can you do to ensure this won't happen to your business?

• Have your own business and marketing plan and use it every day! Review your goals on a daily basis.
• Use that to-do list every day, making sure to cross off your accomplishments. Then make a fresh list every morning of what is left to do, and what other things need to be accomplished in your business/work day.
• Be ready to talk about your business in every encounter you have during the day. Practice a 30 second speech about your business so you are always ready to share it with people, and make sure you ALWAYS carry business cards with you. It looks professional too.
• Hire people to do the work that you are not good at, so your business doesn't fail due to your weaker points.
• Have a Plan-B! Put money by for a rainy day.
• Find a mentor, someone in your field that can help and encourage you with your business.
• Join a small business association where you can network with others in your field of business.
• Work hard and stay motivated.

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