Are you starting a new business or struggling to get one off the ground? Sadly, about 20% of all new businesses are unsuccessful in the first two years.
But that doesn’t have to be your future. Here are three big reasons small businesses fail and how you can prevent that from happening to you.
1. Making money mistakes
If you have trouble keeping a close eye on your business finances, you can easily pay too much for supplies, equipment, and other things for your business. Without a budget, you may even end up spending more than you can afford, which can quickly lead to money problems.
Pro Tips: Start by creating a budget for your business and sticking to it. Keep track of your sales, expenses, and profits. This will help you make decisions about how to handle money for your business.
2. Making no changes
You can be too focused on your business idea. Refusing to make any changes to your business, especially when people change how they use your type of products or services, is another common business mistake.
To be successful, all businesses need to be able to change with the changes affecting their industry. For example, Starbucks originally sold coffee makers, Instagram started as Burbn (a check-in app), and Netflix launched by mailing DVDs before the streaming market made those DVDs outdated.
Every brand changes for one reason: to survive the changes happening around them.
Pro Tips: Be ready to let go of your original business idea if your business is struggling or the trends around you are changing.
Be open to change and offer a new product or service your customers want.
3. Making the wrong plans for your business.
The old saying is true: “When you fail to plan, you plan to fail.”
When you don’t have clear business goals, it’s tough to make good decisions and find helpful strategies to grow your business.
Pro Tips: Build a realistic plan based on the sales you’re making now and what you expect to sell in the near future.
Your plan doesn’t have to be complicated, but make sure it includes the following:
- Your business vision, mission, and goals
- Research and trends related to your industry
- Possible problems and solutions
- What you need to run your business
Final Thoughts about Reasons Small Businesses Fail
There’s no reason you can’t grow a successful business and avoid the problems that have knocked down others.
Sure, success isn’t guaranteed. But you can avoid these common business mistakes:
- Making money mistakes
- Making no changes
- Making the wrong plans for your business
Follow the solutions and tips in this blog post. The result? A growing business that you can build for years to come.
Photo by Kostiantyn Li on Unsplash
