While it is exciting to start a business that you are passionate about.But truth be told, not all businesses are positioned for success… right away. At this point, you may have already come up with a business idea and planned out your business goals of being the next big thing. You may perhaps dream to be the next Amazon, Alibaba, Facebook, Google, and the likes.
80% of businesses fail in the first 18 months of their operation. There are a lot of factors that contribute to this sad reality and here are some of those – Bloomberg
In fact, only about two-thirdsof businesses with employees survive at least two years, and about half survive five years.
So with this information that you are reading now, how do you position your business to grow and attain your mission?
We have here five reasons why businesses fail and how would you avoid it
Let’s admit it.Where you go, your business goes.The rise and fall of every business lie heavily on the man behind it and that’s you. You have the sole discretion on choosing your employees, what systems to use, what strategies to implement and so on. As a leader, there are factors that you can control and cannot control and you have to focus on those you can.
The late Steve Jobs failed big time when he was younger.
This failure led him to the biggest opportunity of his life. He learned to never be reckless in his decisions and made calculated actions to reach his way to the top.
“Getting fired from Apple was the best thing that could have ever happened to me… It freed me to enter one of the most creative periods of my life… It was awful tasting medicine, but I guess the patient needed it.” – Steve Jobs
Be reminded of your vision in the first place.You have to realize why you started the business.
Remember that very first day you got so excited to share about your vision to the world.
You want to make an impact, right?
Mind you, every entrepreneur experienced the same before they succeeded.
You have to keep moving forward.
More than anything, your business’ most important asset is your PEOPLE. Some business fails to recognize it and do not work on the asset that gives them the profit. Toxic work environment could hurt the productivity of the employees or worse they could end up looking for another company to work on.These problems could be solved by providing them with a good and positive working environment.
Here are the top 5 things that you must do to improve your company culture:
You have to handle conflicts immediately
Empower your employees in doing their task
Encourage your team to work together
Set a standard that everyone would follow
3. Bad communication with customers
Some business fail because they forgot to talk to whom they need to talk to
If you do not know the people you are selling your products or services to, then we have a big problem. You have to realize that your customers could change over time and not having communication with them could hurt your company in the long run.
You have to know why they buy a certain product and what do you think you could do to gain their trust.
Click here to read the factors on why they buy your product.
Increase communication with your customers would allow you to navigate your strategies based on their needs
Launch a system that would encourage customers to speak to you, It could be in the form of a loyalty program. Amazon Prime is a perfect example of why every business owner should hear their clients.
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” – Jeff Bezos, CEO of Amazon
We could help you launch your loyalty program seamlessly. Fill up the link below to know how:
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4. Poor Financial Management
Cash is the lifeblood of every business and unfortunately, a lot of businesses fails to account it. Having big revenues doesn’t account to good net income. Because of poor financial decisions, your business may fail.
You have to take into account every transaction of your business regardless of how big or small it is. Sometimes, our eagerness to sell more products could cost our entire business.Let’s take for example the story of H&M and its unsold inventory that accounts for $4.3 billion dollars. Because of their eagerness to sell more, they overstocked and made news headlines everywhere. This kind of problems could be solved by having a system that would manage the inventory levels, sales projection, and order management of your company. Omnirio could be able to help you with that.
5. Failure to adapt to trends
“The measure of intelligence is the ability to change.” ― Albert Einstein
Yes, the world is fast evolving. Failure to adapt to any changes could make your entire business fail.We saw how Nokia thrived in the early 2000s only to be sold in the years later. As a business owner, you have to be able to adjust to changes brought by factors you can’t control.
Focus on things that would stay the same over a long period of time.
“In our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ I just wish you’d deliver a little more slowly.’ Impossible,” Bezos shared.
With these, your business strategy will never be lost even when the world is fast changing.
You have to position yourself for changes and be willing to adapt to it.