Latest posts by Daniel Brown (see all)
- 6 Common Pitfalls That Ruin Businesses & What You Can Do to Avoid Them - February 19, 2019
There is no way to predict each and every scenario that could lead to the downfall of your business. There are too many of them, and some are – well – pretty much unpredictable. Still, there are certain problems that are quite common, and serious enough to cause many companies to go out of business. Those can typically be prevented with a bit of planning and effort. Here are the most important ones.
1. Bad marketing strategy
Statistics say that 47% of small businesses owners handle the marketing by themselves. While this is not necessarily bad – and notwithstanding the fact that some of them are undoubtedly accomplished marketing experts – it does show a certain attitude toward marketing in itself. Many people tend to see it as a less important aspect of a business, which is simply not true. If you don’t put some effort into marketing, chances are that all the customers will flock to your competitors. In order to avoid this, make sure your marketing efforts are smart and efficient. In the world of social networks and the internet in general, it can be really inexpensive. Use the blessings of the digital age to approach your customers and make yourself visible to them.
2. Insufficient capital
In order to stay in business, your startup needs money. If you don’t already have a decent sum of money to invest in your business, go over some serious calculations before you decide to get a loan from a friend or a bank. First of all, do the research. Find out about all the laws and taxes that concern your business, and see how much money you’ll need for that. Make sure you have enough money to run your business for a period of six months, even if you don’t make a profit in the first couple of months. Think about your employees, if you plan to hire people, and plan for their salaries. Once you know how much money you need, you can see if you are ready to start a business, or if you need to find additional capital before you do.
Many businesses fail because they don’t keep up with the competition. Your competitors may have stronger marketing or more innovative products which will naturally attract the customers to them. In order to stay in business, you need to keep an eye on the market and be aware of the things that your costumers find attractive and desirable. Knowing what is in high demand will help you stay a step ahead of your competitors and it’s the only way to keep your business prosperous.
4. Poor growth speed
If your business doesn’t grow fast enough, you’ll lose potential customers and the revenue that comes with them. If it grows too fast, there’s a risk of overworking your resources, undertrain your staff, fail to meet the demand, or leave your customers with conflicting experiences. In addition, it can cause some of your employees to quit, because the pace of work changes as well. Make sure you work closely with your marketing and HR departments in order to pace the growth of your business well.
5. Staff issues
A significant number of businesses shut down because of staff issues. Sometimes there are communication problems among important members of the staff, and these problems harm the business. Sometime badly-paced growth causes employees to leave the company. In any case, in order to avoid these issues, you need to hire the best professionals available. For example, disabled people are a seriously underused resource, and depending on the state you live in, you get certain benefits when you hire them. In Australia, for instance, there is the NDIS program. If you are interested in this option, you can always ask for support for NDIS providers, in order to make things easier for you and your future employee.
6. Bad (or non-existent) business plan
While enthusiasm is one of the most important things in starting your own business, the success of the said business depends heavily on good planning. You need to formulate your short-term and long-term goals very early on and make sure you have a sound strategy for achieving those goals. Make sure your plans are more flexible and fluid than rigid and final – things change, and you can’t predict everything that can come your way.
Even though some (or all) of these issues can really harm your business, all of them can be easily prevented. Make sure you plan your every step with care, and your business will flourish.
Featured image: Pexels