It’s a sad reality that businesses fail, and it’s not always for the same reason. In fact, according to research from Intuit, 83% of all small businesses will never make it past the first year of operation.
And yet there are plenty of people who believe that their company should have been able to survive a few months or even a few years longer than they did.
In this article we’ll identify exactly why some businesses fail in their first year or so. We’ll also give some tips on how to avoid making these mistakes yourself!
1. They lack a clear business plan.
A business plan is a guide to help you achieve your goals. It’s a document that describes the business and its operations, so it should include the purpose of your company, its structure (how many employees are there? Are they part of an independent subsidiary or parent company?), market it serves (what’s its target customer demographic?), and how it will compete with other businesses in this industry.
A good marketing strategy would also be included in this section; for example, if you own an ice cream shop called “Ice Cream Shack,” then maybe you could write something like: “We sell premium ice cream cones made from premium ingredients like organic coconut milk & organic cacao nibs.”
2. They don’t stay true to their mission.
- Your mission statement should be short and to the point.
- Your mission statement should be easy to understand.
- Your mission statement should be something you can live with, even after years of doing business in the same way, or something that can change over time as your company expands or contracts.
3. They don’t adapt to the competition.
Businesses that fail to adapt to the competition are often those that have been established for a long time. In this case, it’s common for businesses to become complacent and fail to keep up with changes in their industry or customers’ needs and wants.
It’s important not only to keep up with trends in your industry but also be aware of any new competitors who may enter into the market at some point or another. If you don’t know what they’re doing, there’s no way you can respond effectively if they decide they want more than what you currently offer.
4. They don’t respond to market demands.
Responsive businesses are the ones who respond to market demands. They know their customers and understand what they need, which is why it’s so important for them to listen closely when consumers complain or tell them that something isn’t right.
If you want your business to succeed, then you need a responsive team of people in place who will work hard at making sure all of your customers feel like they’re being heard and taken care of.
5. They don’t dominate their niche.
- You must know your niche.
- You need to know who you’re competing with, and what they offer that yours doesn’t.
- You need to understand the market’s needs, wants and desires.
6. They lose focus on the original goal.
Focus is key to success. Too often, businesses lose focus on the original goal and get sidetracked by other things. They don’t notice that their customers have changed or that the economy has changed in a way that makes it hard for them to make money. If you want your business to succeed, don’t let anything distract from your goals; stay focused on what matters most!
Think about it this way: if someone told you they were going to give you $10 million dollars if they saw one more dollar in sales at any point during their life span…wouldn’t that be something worth working toward?
7. They are unable to scale.
Scaling is the process of expanding a business to handle greater demand. It’s important not only because it lets you grow, but also because it keeps you from running out of inventory or dealing with too much inventory.
If your company doesn’t scale properly, then it could mean that either:
- You’ll have too much inventory on hand (and won’t know what to do with all of it). Or
- Your customers will be disappointed when they come in and find nothing left in stock (or worse yet—you’ve run out completely).
8. They try to do too much at once.
One of the biggest mistakes businesses make is trying to do too much at once. They want to be all things to all people and end up failing because they can’t possibly meet everyone’s needs.
The best way to avoid this problem is by focusing on one thing and doing it well. For example, if you’re running a restaurant, maybe you shouldn’t have a full-time cook behind the counter while also managing an online business selling your recipes (and whatever else). Instead, pick one job that makes money and focus on that–then build off that success with other things like consulting or writing books about healthy eating habits for children who might not get enough nutrients from their parents’ meals (or even just themselves).
9. They forget the basics of marketing and sales.
The lifeblood of any business is marketing and sales. You can’t have a successful company without both. You need to be able to sell your product or service, but you also need to be able to market yourself as an entrepreneur, which includes selling yourself as a business owner.
In order for any company or individual in this industry (online marketing) they must first understand who they are selling their products too before they can make them known throughout their target audience base. This means that if someone wants something like a website design then they have already made up their mind about what kind of website design would best fit them so there isn’t much room left for negotiation on either side!
10. They are too slow to make decisions and take action.
It’s not enough to make a decision. You have to act on it quickly and decisively, which is especially difficult when you are faced with a multi-person team or even just one person who has your back. Decisions can be made more quickly if everyone involved is clear about what needs to happen and how they contribute, but even then there will still be some resistance.
Takeaway
If you have a business plan, you’ll be more likely to succeed
A business plan is a document that describes your business. It helps you define your goals and objectives, target market, competitors and strengths/weaknesses.
If you have a good idea for a new venture but don’t know where to start or what resources are available to help you grow it into something successful – then this might be the reason why your company fails!
Conclusion
The best thing you can do when your business isn’t doing well is to make sure that you know why it isn’t doing well. Don’t let the setbacks get to you; instead, use them as an opportunity to learn more about yourself and your business. You need this information in order to improve yourself and grow as an entrepreneur so don’t throw away those failures!
