Starting a small business is an exciting venture that can be truly rewarding, but it’s also one that comes with some risk. The Small Business Administration states that about 50 percent of new businesses will fail within the first five years, which means that many of your fellow entrepreneurs didn’t see their new business idea through to success. If you want to avoid being one of them, consider these six reasons why challenges fail.
They don’t know what they are doing
Being a small business owner doesn’t mean you know how to run your business. If you’re reading an Entrepreneur magazine, it means you have an interest in what it takes to start and grow a business. The first step is taking some time to educate yourself on all aspects of starting and running a successful small business. Start by reading books or articles about specific issues like marketing, finance, human resources or operations management.
Too much on their plate
A lot of small businesses grow faster than their founders can handle. This leads to overworking, understaffing and a lack of focus that can kill a business in its infancy. Before launching your business, take a hard look at what you have time for and make sure you hire an assistant or bring on some other resources if you’re stretched too thin. Remember: If it doesn’t move, it doesn’t matter.
Whether you’re selling handmade jewellery, launching a mobile app or trying to start a new tech company, there are some things you can’t control—the economy, your industry and current market trends. But in many cases, what happens to businesses when they fail has much more to do with bad timing than anything else. For instance, if you launch a retail business right before interest rates skyrocket on credit cards (as they did in 2008), your customers might not be able to afford your products and services.
Poor customer service
Customers don’t mind paying more if they know they’re getting good service. Invest in learning customer service skills so you can provide quality care to every customer who walks through your door. Your business will be rewarded with repeat customers and word-of-mouth referrals, both of which are key ingredients for success. Don’t skimp on hiring a professional receptionist either; most customers won’t mind waiting a few minutes while you handle other matters, but no one wants to feel like they aren’t important enough for you to answer their call immediately.
Not Being Realistic
Many business owners overestimate how much demand their product or service will generate. If you want to open a dog bakery, for example, how many people do you think are going to pay $25 for a cupcake? Probably not many—at least not until you spend some time promoting your business and building up a customer base. That’s why it’s so important to think realistically about what your business can produce when it launches.
Hiring the wrong people
Quality employees are essential to your business’s success, and hiring people who don’t fit in with your values or work ethic can be costly. It’s important to hire slowly, carefully vet candidates and check references before you make any commitments.
His experiences working for top brands like Unilever and Samsonite inspired him to write ‘The Rules of Work. Shivank set out to provide non-bullshitty, fact-based career advice that helps millennial workers get more opportunities and grow their careers faster. This blog is where he documents the daily challenges he and his colleagues face. Check him out on OfficeProductivity.org.