You must have planned to start a new business or recently started it but you don’t want it to fail, and that’s what we all dream for. But you might found a disturbing statics report by SBA that about 20 percent of the new businesses in the first 1 or 2 years and that percentage increases to 45 percent in the following 4 years. All that is terrific.
But there is great news for you that I want to pass on.
If you have recently started your new business or you have just planned for it and you’re researching primary reasons that so many businesses fail then actually you don’t possess the top primary reason for which so many new businesses fail – that is lack of knowledge.
Your commitment will definitely assist you in all finding possible ways to reach your goals because you’re not one of those failures as you have a curiosity to research and make things happen.
Now let’s dig deep into the top 5 reasons that don’t let new businesses grow in the beginning.
Top 5 reasons businesses fail
Here are the top 5 reasons that so many new businesses fail. And how you can avoid them to make your business successful.
- Lack of knowledge
- Lack of support
- Lack of a business plan
- Lack of finances
- Lack of Patience
Lack of knowledge
Lack of knowledge is the primary reason that new small businesses fail in the first few years. Here knowledge means looking at every possible aspect of your business to make it happen successfully. It demands a lot of research and that’s what we don’t do.
We human beings are always in too much hurry, we don’t want to waste time, stopping by and exploring something deeply, we just want to get results, and it becomes the most significant reason behind small business failure.
Actually, in our routine life, we don’t rely on research, we just believe in the information that we get from anywhere without authenticating the source, but this doesn’t work in the business.
Business demands you to look at everything that belongs to it. Your business growth is just like human growth, if you don’t find the right growth hacks, the right food, and the right atmosphere, it can’t be healthy. Surely, it will suffer a lot in the upbringings.
So to build a successful business that doesn’t fail in your life until you turn it off, you should give it time researching it. Your research will be the pillars of your building you’re building.
Now the question is, how to start your research? Here are some must to know questions that you should explore before starting your business so that it doesn’t fail.
- Why do people succeed in this business?
- What are the top 5 reasons some of them couldn’t succeed?
- How much space is there in the market?
- Why people would prefer your product?
- Can you provide something better at cheaper rates?
- What exactly do you want from your business? Build Brand, double your money, or what?
Once you’re done with these questions, with sincerity, then you’re far more secure than 60% of the new businesses start along with you.
Lack of support
Appreciations and support play a vital role in your business success, so if you don’t have a supportive atmosphere around you then surely it’s gonna be a hard thing.
Support can be of any aspect, it could be of those who have no concerns with your business (your friends and family) and of those who are in the business (your teammates). You need support from both sides.
Sometimes when we are starting something quite new, most people resist it. Your friends, and family won’t believe in your idea and hence you won’t get the support that you might need in the early tough days. This happened to me when I started blogging until I started making money from it.
And if you lack support from your teammates, then how can you expect something good?
In any of cases, you should find people who could believe in you, encourage you, and appreciate you for what you have done, or doing with passion because it helps us keep running.
That seems quite magical or illogical that moral support plays a vital role in your business success. But as we are humans, we are actually emotional animals, we need emotional satisfaction for something we are working on so that we could keep working on.
Otherwise, if you don’t get results in the early days, that you shouldn’t even expect, you might change your mind and quit the game. This is what happens with many of the new businesses.
Lack of a business plan
If you don’t have a business plan, you can’t succeed, at least you will pay more for getting less.
Most of the startup owners use to claim that they have their business plans in their minds which actually means they don’t value their time and business too much. If you don’t have time to make a road map for something you want to run for long, you’re not supposed to be sincere with it.
The other benefit of a written plan is that it saves your 10% efforts. That’s not over. When you a written plan for something you are far more clear about everything than a dusky plan in your mind.
Your business plan is a roadmap to monitor everything. You can practically monitor what you had expected and how things are going? But if you don’t have it, you can’t measure your success or failure, you can just suppose it to be running fine.
You also face many other troubles that can result in great loss.
For example, when you don’t have a well defined financial plan, you can’t decide how much money you should spend on each department to let it run smoothly. But while preparing a business plan, you keep the importance of each department and decide the budget according to its needs.
Lack of finances
It’s among the top reasons that new small businesses fail in the very early years. If you don’t have the required finances in your pocket, you can’t feed your business, and as a result, it won’t yield anything.
In most cases, especially for small businesses, people don’t keep the required money to start a business in their pocket for their businesses.
For example, according to “The Small Business Bible”, you should keep 6 months’ expenses of your new business as a budget to start it and shouldn’t expect anything in the first 6 months.
Still, in most cases, new startup owners plan to make profits from the very first month and they keep that hypothetical profit as a part of their budget. But when things don’t go the way they expected, maybe, because of the lack of appropriate knowledge or because of any other reason, they suffer a significant loss.
Lack of patience
Patience is a pillar of business success.
Let me give you an example for better understanding. The majority of the bloggers who join blogging, don’t make money from it and quit it quite sooner because they don’t understand that blogging takes time. Blogging actually depends on SEO and SEO is something that takes up to 6 months to get your results. In blogging, things don’t change overnight.
The same is true for every business, when you just started a business, it always takes time to become a part of that market. People’s minds change quite slowly. You might have to for years to become a brand. But most of the new businesses are in a hurry to get results as others are getting. They don’t see the effort someone made to get that position.
If you don’t have the patience to work on it for long, you shouldn’t expect something great, because those who are in a hurry make more mistakes. So it’s a pillar of business success to work with passion and patience.