Why Do Some Businesses Fail While Others Succeed?
Many people have a dream of owning their own business, and in today’s world it’s easier than ever to get out there and start one up. With so many free tools and online resources available, your small business could conceivably almost run itself, so why do more than half of the new businesses fail?
They didn’t plan properly
To be successful, you have to know where you want to go, and how you are going to get there. Not planning out your short and long-term goals can hurt the growth of your business. The first step to becoming a successful business is to develop a sound business plan.
They tried to take on too much at once
It’s great to know how many locations you want to open, but if you try to open them all at once before your customer base and demand can support it, the upkeep is just going to bleed your cash flow dry. Taking it one step at a time and cementing your foundation firmly before building up will give you the stability you need to stay successful while others overreach and fail.
They didn’t manage their cash flow properly
Knowing the difference between simple ‘cash flow’ and ‘positive cash flow’ is crucial to any business. Your revenue keeps you afloat but your profits help you grow. Some people think as long as they have enough coming in to cover the bills they’re in good shape. This is true, but in the long run if you don’t make more than you put out then you’ll never have the capital to grow your business.
They didn’t know their customers
It is difficult to start up and sustain a successful business if you don’t understand your target market, or fail to listen to the customers you do have. When you don’t ensure that you’re keeping your products relevant to your customers and addressing concerns, how do you plan on keeping those customers? Investing time in researching your target market and getting to know your existing customer base will go a long way towards maintaining a successful business.
They didn’t manage things properly
Whether it was marketing, inventory, finances, or the overall running of the business , they failed to ensure that these areas were being managed properly. No marketing means no new customers, however too much can put people off. If you have no inventory, what are you selling? On the other hand, if you have too much, well, that’s lost money. Mistakes in bookkeeping can throw everything off.
Lastly, taking care of your employees is just as important to the success or failure of a business. Not only ensuring that your employees are happy, but also meeting your obligations to your employees as an employer, such as superannuation and workers compensation.
Visit the Nationwide blog to find more tips on how to make your business a real success.