According to the Bloomberg, about 80 percent of the small businesses fail within the 1.5 years of its beginning. Businesses lose their 80 percent of the revenues that have invested in such a short span of time. What are the reasons of this high percentage of business failures? What mistakes do these entrepreneurs make that cost them so heavily? Here are some of the core reasons of failure in businesses.
Distance from customers
One of the core principles of doing successful business is to interact with customers and establish a relationship with them. The purpose of that interaction and relationship is to know what your consumers’ opinion, which products or services they are enjoying and which one your services or products they do not like. Instead of an idea of making a product that can benefit you or you like it personally, go for the products that their customers want them to make.
Lack of uniqueness
Lack of uniqueness is another reason because of which many businesses get shutdown every now and then. Entrepreneurs step into a market in which some companies are earning handsomely and expect the same results for themselves. But, they do not think that why people leave behind their old service provider to take their services if they are not offering anything new. There is a modern saying business that “Only two things get successful today, one that offers quality, second that is free”. If you your product is not superior than the available in the market, neither has some real price advantage, people will not head towards your business.
Poor leadership at the top of hierarchy
Leadership is a necessity for the sake of successful business. The entrepreneur himself/herself should work his heart out and inspire his/her employees as well. Other than that, employees need motivation to work well, and the best ways to motivate the employees is offering them incentives, backing them up and understands their problems.
There is a famous principle that in order to win the contest, you should never underestimate your competitor. The same idea applies to threats to businesses as well. Rivals that are comparatively smaller in size can sometimes outclass you. Try to be fully aware of the activities that your rivals are performing and plan for steps accordingly. Other than that, the modern threats to businesses such as a data breach threat should be dealt with due care as it can harm your company big time. Especially the use of portable drives increases the probability of data breach quite high. You keep your portable drives protected by using data security software that can Password Protect Drives.
When you plan to start a business, you have to do a fair bit of research about the market, the rivals you might have, the idea of profit it can offer you and other such aspects of the business. The more you research; the better there is chance that you will run it successfully. The most important rule that is to be remembered in business is that “Hope for the best and prepare for the worst”. You should have a comprehensive plan B, so that if your original plan gets fail, you have a backup strategy.
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