Close to 90% of all small scale business startups fail before they are even a year old. Such businesses tend to be drawing in more costs than they gain thus leading to losses which actually paralyse the business causing a premature closure.The main goal of starting a business is to make profits therefore if the goal is not achieved, failure is experienced. Here are some reasons why most business start-ups will not see their first year.
Lack of management experience
Most first-time business owners lack a management background and in general managerial skills, they are unable to plan the day to day operations which results in disorder.If the business is to succeed, the entrepreneurs need to undergo training on how to properly operate a business.
Failure to incorporate technology in the startup
Technology is a major factor in determining whether a business will succeed or fail. Small business owners tend to ignore that factor and hope that they will save some money by leaving technology out. This may be suicidal as their competitors may be well equipped thus leaving the startup business out in the cold.
The entrepreneurs may not be in a position to adequately fund the business, some may not fund the business adequately as a result of poor research and evaluation.
Poor business research
Before you can start a business, you need to be aware of what you are getting yourself into and properly identify your target market and identify the costs. If research is not properly done, then success will be impossible.
Unwillingness to ask or bring in help
Most first-time business owners have the ‘I can do it all’ attitude which makes them not to seek help especially in matters concerning management and technology. They view asking for help as a failure but it is what drives them out of business.
Over expectations of your business
Most business owners think that they will start making huge profits right after starting their operations. They don’t give the business time to mature enough to be able to generate income for them. This leads to frustration and most of them give up even if they were on the right course.
Lack of business planning
Business owners fail to plan for their future and put achievable short term and long term goals. Failing to plan means that to the business does not have a specific direction to head.
Not understanding customer habits and needs
Most businesses say that the customer is always right but they don’t work towards understanding their customers thus most of them lose touch with their customers. Customers are the ones who support a business, if a business does not have customers then it will not generate profits thus leading to collapse.
Not learning from past mistakes
Businesses should be able to learn from their past mistakes and capitalise on the failure of their competitors. You should make it upon yourself to do through research, analyze your business and identify past mistakes and come up with ways through which they can be adjusted. Mistakes should actually work to your advantage as you already know what can work and what cannot.