Every owner of a new business faces battles he never thought he about. In fact, the financial company Bloomberg has done a study that estimated that up to 80% of new small businesses often fail in an estimated 18 months.
If you are an entrepreneur , do not despair: So if you’re starting the way of starting a business venture, as if you are the owner of a company that, unfortunately, going to have to close soon, you will find all the tips for success in your new business or reopen the doors of your company.
The main reasons that small businesses fail
There are many reasons that your business could fail : you external conditions (such as market entrants or unexpected costs in your company increases) Financial, poor planning problems …
But there are other causes much more common than you, as owner, could (and can) avoid when to manage it:
- Inadequate cash reserves: Know that in the starting a business , you need at least a cash reserve of 6 months as a buffer to handle it until you begin to make a profit.
- Failure is not defined and clearly understand your market, how to win potential customers , and what their buying habits.
- Not fail to make an appropriate price for your products and services: many owners want to offer their products as the best and, in turn, the cheapest ; but this is the worst strategy you can have, because if the two paths are chosen, you will not get anywhere (and you have to close your doors ).
- Failure to not anticipate the flow of money appropriately: some suppliers require that you pay at the time when it comes to new businesses , which can quickly drain your cash reserves.
Moreover, add to this the long months of waiting for a refund if you allow your customers to buy your services or products on credit in several months. This, for you, can result in a business trap fatal.
- Fail in not knowing anticipate or react to your competition, technology, or other changes in the market: when you’re busy, it’s easy to look the other way . when things around you are changing
But imagine that your products are aimed at a clientele of people young and trendy, yet your business is located in a community where the population is aging (and you you have not even noticed). Sooner or later, this will entail a serious problem.
- Believe that you can do everything yourself: one of the biggest challenges facing an entrepreneur is being able to leave the reins of the company and delegate to employees that you trust. Therefore, you must conciliate this and understand that you can not do everything yourself .
You must relegate workers who have proven that you can handle the responsibility and make things happen, and trust your judgment.
So what can I do to fix it ?
For starters, hire professional services experts such as lawyers, accountants, and managers with experience in other companies like yours (and is much easier than you can believe the find the best candidates ).
No matter how enthusiastic, intelligent and brilliant that you can be because it probably will not be an expert in all these fields ; although at first it can be hard to split your budget to pay for these professionals, eventually you will be very profitable and build your business on a more solid foundation.
Also, you should seriously consider learning as much as you can about business management . You can take courses offered in your area or attend conferences and conventions in college.
Know at least the basics of finance , accounting, marketing, and everything connected with it can really be of help to make the right decisions along the way that will cover your business.
Join a partnership of your own guild
A great benefit that tends to be when the owner of a small business is that you can rely on expert insight from other business owners like yours that have gone through the same thing you before.
Certainly, anyone who has released previously a small business can advise you on all the questions that arise in your project you. So looking for friends , family, or acquaintances who have (or have owned) similar to your own company, as they can be a treasure within questions you might have .
Along with all this, you should seriously consider joining one of the many associations that is on your industry, and attend their conventions and meetings in your city. You’ll soon learn that even the most successful owners have also been in the same spot where you are and have experienced the same concerns that you have today.