Last Updated on January 27, 2019 by Jessica Adams
Within the first years of their existence, up to 30% of small businesses will fail. The rate of failure increases over time, reaching up to 50% within the first 5 years. For aspiring entrepreneurs, the most common reason why small businesses fail, that comes right to mind, is lack of budget.
It is true that small businesses struggle to come up with the necessary budget for a big enough market launch. However, a limited budget doesn’t make it on the list of the top 3 most common reasons for the business collapse.
In fact, if you’re in the process of launching a solo business, you should pay close attention to some essential factors that are within your control. More often than not, newcomers to the business world can fail to prove a solid basis for their company growth. You need to think of your company as a new player in a long-standing game.
As a business owner, your decisions offer guidance, pace, and direction to the overall company. Consequently, when things are not following the path they should, your first line of action is to question your leadership decisions and your overall perception of your company.
Top 3 Reasons Why
Small Businesses Fail
They Don’t Make Themselves Visible
As surprising as it might sound, a lot of small companies forget to make themselves visible and searchable to their audience. While you can prepare a website launch, you need to be realistic. Every day, hundreds of new websites pop up on the world wild web. It’s impossible to get yourself noticed with only your web presence these days.
You need to set up a baseline for visibility. On the one hand, your social media profiles can use #hashtags and helpful @mentions to reach a new audience. On the other hand, your physical presence is equally important.
It’s a good idea to surround yourself with visibility specialists. A specialist who could introduce you to someone at an awnings company, who could then paint your branded lettering onto the front of your shop. Something truly spectacular and big enough to really be seen. You need to assume that people aren’t going to waste time looking for you; make yourself accessible immediately.
They Become Victims of Self-Depreciation
What’s the point of launching a business if you don’t believe in yourself? Picture the journey of a woman starting an auto-repair shop. Should her journey be any different than the journey of a man launching the same business? The answer is no.
Her journey should be the same because ultimately, her company has the same financial, marketing and organizational needs. You shouldn’t project your personal fears and worries onto your business plan.
They Don’t Understand Their Market
You feel confident about your company. You’ve promoted your location and services, but somehow you fail to attract customers. The first thing you want to check is whether you’ve targeted the right audience for your business.
Indeed, too many enthusiastic business owners skip the market research. They find themselves in a situation where they waste a lot of their budget and energy advertising services to the wrong market. You need to understand who your customers are if you want to convince them to buy.
It’s never easy to manage a company on a reduced budget. However, don’t be too quick to blame your business failures on your small budget. Indeed, most mistakes happen at a management level.
Edited by Jessica Rose Adams
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