business failure – Growing Forward

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The reason for business failure can be down to many things, most commonly though it is often tied to the reason that the owner was ill-prepared when starting the business. When the average ‘joe’ hears ‘business’, they generally assume that the primary reason for starting your own business the desire to make a lot of money and that ‘business’ is always based on the circulation of money. They aren’t wrong, but they are also not right. Do you think that if you started your own successful business that you’d have more time with your children or family? Or maybe that being the boss, everything would be smooth sailing as wouldn’t have to answer to anyone else? While these are benefits that some successful entrepreneurs achieve, after years of hard work, they are not reasons to start up a business.

Here are some of the most common reasons start-ups and small businesses fail.

Poor Management

At the start of creating a business, there is a lot to do and consider getting done and more often than not, new business owners frequently lack relevant business and management knowledge or experience in areas such as finance, stock purchasing, marketing, production, and even hiring and managing their employees. If the business owner doesn’t recognize what they don’t do well and seek help if they don’t comprehend the issues, then the company may fail and go out of business. There are plenty of administrative and vocational courses, some free, some paid for, that small business owners can take advantage of to educate themselves on skills they lack, hire skilled employees, or outsource work to competent professionals.

Lack of Planning

If you have ever been in charge of planning a major event then you would know that you were not careful with methodically and strategically planning it, which includes a lot of team collaboration and hard work, then success may have not followed. The same could be said of any business success. Having a plan, or Business Plan / Model is critical for all businesses to be on par with the vision of the company. Though, many small businesses fail because of a lack of fundamental foundations in their business planning. It must be realistic and based on accurate and current information with pre-existing affairs with educated projections for the future.

Insufficient Capital

Depending on the type of businesses one sets up, such as a removal company, restaurant or even a web hosting company, there will always be a common factor to think about: How much will you need to start being able to make more? Another common business mistake that can make a business fail is down to having insufficient investment funds.

Often, business owners who are totally new to running a business won’t fully grasp or understand cash flow and underestimate how much money they will need to get the business started. Unfortunately, as a result, many are forced to close before having had a fair chance to succeed. Another financial disaster that strikes new businesses is there also may have an unrealistic expectation of incoming revenues from sales.

No Website, No Social Media Presence, No Back Up

Today’s industries now heavily rely on having an online presence and having custom come through that business platform. An estimated number of American internet users – nearly 90% of the population, used web-based purchases and e-commerce sales in 2016 and continues to rise yearly.

Simply put, every business should strive to have a professional looking and well-presented website that allows users to easily find out about their business, products and services. If you don’t have a website and your competitors do, you’ll lose out. You may also need to have various social media profiles for the services that your clientele might use for the same reason. If a company didn’t do this then the chances are the company will won’t look professional amongst its peers and market competitors, and may even lose business to these competitors who do at least have profiles on popular social media sites.

If you have products that can be sold online, or you can take orders online, that’s an added benefit. But at the bare minimum, you need a website that lets customers know what you offer and how they benefit by doing business with you. Having a Web-Based service for your business will also need to be securely backed up with regular maintenance. Depending on the nature and spec of your application or framework, small business owners may want to consider utilizing services such as Backup and Business Continuity Solutions as part of keeping the business secure, protected at the forefront of your online presence.

When it comes to the success of any new business, the businesses owners and directors are the keys to its success. For many business owners, failure is not an option! Are you one of those determined business people? Let us know your thoughts in the comments below!

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If you’re thinking about heading into business, you really need to understand how fine the line is with success and failure. But if you want to be on the right side of the line, you have to think about everything that’s involved with running a business. To do that is just a mammoth task, and to get every single thing right that you do is completely impossible. But what you can do, is make sure you’re making all of the decisions that will push you towards success, and steer away from the decisions that might not suit your business. We know that every business is different, and you will all be at different points with your journey down the business road. But there are a few simple things that we know you should be doing, that will ensure you’ll stay on the right side of this line always. So, take a few minutes to have a read of this article, and see if you think the tips will help you stay on the right side of the success line!

The Quality Of Your Systems Management

When you first start out as a business, you’re not really going to think about your system management, but as the years go on, it will become clear to you how much your business relies on the systems you create. From data storage, to the whole infrastructure of your IT, it’s really going to define how your business is ran. What you need to do to ensure things such as your data systems are perfect for your company, you need to check out companies such as Caslec Industries Pty Ltd to build you a network that works. You should also think about your server management, and how you manage that. Outsourcing is always the best option for this, so that you have access to around the clock support and management that you might not be able to handle. The better you manage both of these, the smoother your company is going to run.

Profit Management

Profit management is something that you’re definitely going to have to think about, because profits doesn’t mean that you’re always making money. Sometimes a lack of profit can be a real problem for your business, and knowing how to manage that is more important than being able to manage profits. When your losses come, you have to focus on three key things. Marketing, sales, and your product. All of these will need to be improved if you want to increase your profits. You’ll usually find that one area is struggling more, and focusing efforts on improving should slowly increase your profits.

Business Growth

Business growth is definitely something that you want to be experiencing, and slow growth can definitely put you the wrong side of the line. But managing growth isn’t as easy as people think, and if you really are struggling, it might be worth contacting a business analyst to come in and asses your business. They can report on all areas of your business, and perhaps guide you to what needs to be improved.