Seven reasons why businesses fail

business failure

Image courtesy of Pixabay.com and Geralt

Time and time again, people with good intentions and great ideas fail at creating their own business. How many step back to analyze their failures, re-group and try again?  Success comes to those who are able to push through set-backs and learn from their mistakes. Before you start on your next business, take the time to see how others have mis-stepped, and learn from them:

Jumping in Head First without Researching the Business

Let’s face it, people will spend more time planning their vacation than their own business. Before you open the doors, make sure you come up with a plan on how you’re going to market your products and services, how long it’ll take for you to break even, your expenses, if there is a market for what you’re selling, and any learning curve that you need to overcome.

Don’t even think about joining a direct sales/ MLM/ network marketing company without thoroughly researching the model and industry. Find out if there have been any complaints filed against the parent company, what others think of the business, and take the time to decide if you like the products. Simple as this: Do your homework.

Unrealistic Goals/Expectations

It takes time to build your skills. It takes time to become a leader. It takes time to develop relationships. Every business, EVERY BUSINESS requires some skill, capital, and time to grow.

So many people are looking to make a lot of money with little effort. This just isn’t how business works. Put yourself in a continual state of learning, and open up to new books, methods, and ways of doing things. Create your foundation, and build your business on concrete, not sand. People who have invested time and effort over the long haul are the ones who reap continual profit.

Lack of a Duplicatable System

If you’re going into business, you want to be McDonald’s. Well, in terms of their system, anyway. You want a business that is easy to follow, and has been tried over and over again with success. If you’re starting your own company, do informational interviews with others in your industry (but in different areas) to see how they operate. You don’t want to be out there all alone trying to forge your own path. Noble as it may be, it’s longer and rougher terrain.

If you’re joining a network marketing company, get a hold of their system. Find out exactly what’s required, and if you can actually see yourself following their plan. You don’t want a sponsor that’s sponsored a million people with none of them being successful. You want to be sponsored by someone who knows how to train leaders. If you have your own ideas, that’s great too, but make sure that you follow the proven system first. After all, when you start sponsoring people, you’re going to want to have a system in place that will allow others to have success.

Lack of Funding

Plenty of business opportunities that claim it takes $0 to start.  They’re lying.  Not necessarily in an intentional manner, but most fail to realize that a business does need some sort of capital to grow. Marketing materials, training, products, or even just time to learn the business are all necessities.  There are plenty of investors and peer to peer lending groups to help you with big or small loans regardless of your business size. Don’t let a lack of capital stop you from pursuing your dream.  Likewise, don’t charge head first into a business without properly determining how much funding you need, and finding the resources to get it.

Not Tracking Your Progress

It is imperative that you track what you do, and the results you bring. You can’t change what you don’t know is broken, so get out there and track everything you do: Find out how much you’re spending on leads, advertising, and customers. Figure out what your average customer spends: from this you can determine how much you can invest in advertising. If you’re prospecting, track the number of times you call someone, and how often you follow up before you get a sale.

Fear of the Phone

Does anyone out there actually like making cold calls? Many will spend endless hours trying to find a way not to pick up the phone. It can be almost crippling. When you’re running your own business, you need to develop relationships. If you can’t meet face to face then the phone is the next best thing. E-mail is becoming too impersonal, and texting for business is a bit intrusive.

The main source of fear is the unknown. Just remember that the worst thing that can happen is someone hanging up on you, and then the painful process is over.  Try practicing with friends or family, as the more you try it, the easier it will become.

Refusal to Adapt

It used to be that all you needed was a business card or brochure to market to your customers.  Now, you need a website, email marketing campaigns, Twitter, Facebook, YouTube, and so much more. There are websites devoted to simply giving reviews on your products, services, and business.  Beyond being able to reach and connect with customers, many businesses fail to see changing needs, put themselves ahead of the trends, or even just keep up with the competition.  In order to be successful in business, you don’t just ask, “What does my customer need/want now?” but what will they want in the future, and how can you anticipate their needs and position yourself to meet them?

 

 Think about all the extra money you could make by being a mystery shopper, starting your own business, or working from home for a legitimate company.  Take control of your income and check out our LEARN page for a list of classes, books, and more!

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