As an entrepreneur, it can be tough trying to get your startup off the ground. There’s so much that goes into successfully running a business—and some of these things just can’t be taught.
Many businesses fail for lots of reasons. Being a business owner comes with its perks—however getting over the road blocks are usually done in private which makes being a business owner look extremely easy and rewarding.
Don’t get it wrong—entrepreneurship is extremely rewarding, however that doesn’t happen or come over night. Normally, when you first begin your business, if you aren’t aware of the ins and outs of being a business owner, you’re bound to run into quite a few problems. If this is your current situation, no need to fret—we’re here to help!
Here are five common reasons many small businesses fail—and solutions to fixing those failures so they don’t happen again!
- Lack of Funds
As a business owner, it is extremely important that you have funding for your startup. Not putting in the required amount of money it takes to successfully run a business is a huge reason why so many businesses fail. Proper funding is needed to not only start your business, but to simply keep it afloat too.
As a business owner, it is your duty to make sure you establish a stable and well thought out funding plan—whether that’s borrowing a loan from the bank, family or even friends—you have to have a solid plan set in place. You don’t want to be in a position where you have to sacrifice certain ventures within your business because you don’t have the necessary funds. Everything in the world today requires money, and without it—your business can only go so far.
- Lack of Marketing
Another common reason many small businesses fail is the lack of marketing entrepreneurs take. Trying to establish a business without implementing a marketing plan is like trying to drive a car without gasoline—it literally won’t go anywhere without the necessary tools needed to function. Many businesses fail to implement a marketing strategy and quickly realize that their business isn’t “booming.”
Ignoring the need for a marketing plan simply shows that as a business owner, you don’t plan on anyone knowing about your business. Since this isn’t realistic, you must implement a plan so you can market your business and brand to relevant audiences. Social media in particular is an amazing tool to use to implement a marketing strategy for your business. Other things such as content marketing, email marketing, and SEO all contribute to a successful marketing plan for any business.
- Failure to Define and Understand Your Market
If you haven’t clearly defined your market and target audience, how do you know who you’re doing business for?! Who are your customers?! As a business owner, many of them fail because they don’t have a clear distinction between who their services are intended for. You should be able to clearly define your target audience in as little as two sentences. If you can’t define your market, how do you expect your business to stay relevant? Don’t forget who you’re doing this for!
Establishing a business and trying to have your business wear every single hat in the industry is the ultimate setup for failure. Spreading your business too thin and trying to cover every ground is nearly impossible. Find something special about your said business, and hone in on that specialty.
Instead of overgeneralizing your business, make sure you’ve mastered your businesses’ main focus and reason for existing in the first place. Once you’ve established this, it will be easier to develop and strengthen your business to success.
- Unrealistic Expectations
This is probably the number one reason as to why many businesses fail. Many business owners fail to realize that large amounts of profit and instant success does not happen overnight. It takes lots of hard work, long hours, and plenty of tears before reaching that pinnacle. It usually takes at least a year before a business owner is able to successfully develop a profitable business.
Although believing in miracles is cool, it shouldn’t be how you plan on running your business. Many businesses often fail because business owners are either extremely greedy and believe that they’re just a few sales away from revolutionizing their industry, or they’re just greedy and have unrealistic expectations. Don’t be one of these kind of business owners—you or your business won’t make it very far.