The 3 reasons most new businesses fail in the first year - Make Money Online

Header AD

The 3 reasons most new businesses fail in the first year

One thing we can be totally sure of is that nobody is so lucky as to never fail. However, those who do best in the business world,  learn and gain motivation from their mistakes. But we are human beings; it is understandable that one of our fears is the fear of failure and disappointment.

Many entrepreneurs have an excellent business ideas but their fear of failure means they never dare to start their project. Don’t let your entrepreneurial drive fall victim to fear of failure. Instead, diligently research the reasons why new businesses often fail and plan your way out of all eventualities. By being armed with the information you need to spot dangers, you will be able to prepare to deal with them and you will be able to navigate your way through the tricky times that all businesses inevitably go through in that crucial first year of trading.

Here are the 3 most common reasons businesses fail in their first year.

1.      Lack of a Business Plan

Most entrepreneurs start their businesses with great energy and enthusiasm.  But as an entrepreneur you must also have the key essentials needed for starting your business. You must have the right amount and right kind of start up loan in place. You must have the right team around you and the right skills under your belt. You must know your target audience, your product and what you are bringing to the market that makes you stand out from the crowd. All of this takes research.  You must know the market in which you are getting involved; analyse the price ranges, profitability, costs, and your required investment. A business plan will help you structure and organise your project and help you understand the potential pitfalls and dangers for you to avoid. To succeed, get the necessary capital, apply a good sales strategy that guarantees profits and, above all, preserve the business vision.

           2. Temper Your Risks 

To be a successful entrepreneur, it is necessary to have the capacity to take  risks. However, you must also bear in mind that taking risks that aren’t well calculated is foolish. You must be discerning enough to know the difference between necessary risks and unnecessary risks. Don’t risk your start up loan on business ideas that you don’t know for sure hold enough potential profit. Start small, rent a place instead of buying it, open a single branch. Test the market. The misuse of business finance can be the difference between success and bankruptcy.

         3. Lack of Flexibility

You must know what market you are getting into, clearly understand how to earn returning customers, know what their buying habits and needs are. And you must be able to adapt yourself to them and listen to them. Your customers are king. If they tell you that your products or services need to change in some way or other, then do it.  Remember that a satisfied customer will not hesitate to advertise you.

Also, remember that successful companies are formed based on a good team of partners willing to support each other. One of the great challenges that entrepreneurs face is finding a team that bring the right skills to the table. Being surrounded by people with your same interests, who share your vision, can benefit you both morally and economically, and enable you to together face the challenges and overcome them. In other words, you will be more motivated to take your business to success if you surround yourself with those who share your same dream.

If you fall don't stay down!

Sometimes new entrepreneurs fail due to lack of experience and perhaps because they are too caught up in one element of their idea without noticing that success requires a joined up approach to thinking.

Failure can be seen as a necessary time to reflect on your journey and the distance that remains uncovered. It is an opportunity to rethink new goals and change the pace. Do not despair or fall into failure.  Take note of others’ mistakes and learn from them, so that your killer business idea can really take off instead of being tethered to the ground by a fear of failure, or a lack of planning and preparation.
The 3 reasons most new businesses fail in the first year The 3 reasons most new businesses fail in the first year Reviewed by RAWAT on 9:51 PM Rating: 5