How To Avoid Business Failure

Nine out of ten business failures in the world are caused by lack of general business management skills and planning. While no entrepreneur should start a new venture preparing for failure, they should have a clear plan for success which involves actions if things do go wrong. Business failures can be classified into two categories namely: Catastrophic failure and general lack of business

Catastrophic failures are the primary result of economic factors; lack of profits is the primary reason. It can be as a result from the death of a partner, fire, fraud, burglary. Yet of all failures of business, statistics reveals that about 88.7% are due to management mistakes.

Mistakes That Leads To Business Failure
  • Going into business for the wrong reasons.
  • Being in the wrong place at the wrong time.
  • Entrepreneur gets worn out and/or underestimate time requirement
  • Allowing family pressure on time and money commitments.
  • Pride
  • Lack of clear focus.

Causes Of Business Failure

I know of three major causes of business failure which are explained below:

1. Money: It takes a longtime for a start-up company to break even because unforeseen contingencies always develop. If you raise insufficient capital and only achieve small success by the time your money runs out, investors perhaps will not be interested in throwing good money after bad one.

2. Management: The aspiring majority of entrepreneurs fill their management ranks with friends. This is not only surest way to break up a friendship; it is also the most predictable way to enhance failure. Never hire acquaintances to join your management team unless they have management experience appropriate to the field of business and they are willing to openly disagree with you. Otherwise, you are destined to have mediocre business success at best.

3. Marketing: This involves far more than just knowing market and motivates it. Most businesses focus on the marketing "push", but few ever focus on the "pull", which is one of the secrets to success. The key is to focus on the pull; it is the entrepreneurs' responsibility, not that of your dealer, to make potential customers aware of what your product will do for them.

Ways Of Improving Business Success
  • Development of a business plan.
  • Obtaining accurate financial information about business in a timely manner.
  • Profile of target  customers.
  • Profile of competition
  • Go into business for the right reason.
  • Network with other business owners in similar industries.
  • Become better informed of the resources that is available.

with this point of mine, i hope it help in your business growth and i hope this was helpful, if so please share with friends and leave a comment and please subscribe for notifications on our next article. Thanks.

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