Guest Post

Different people start businesses for different reasons. Many want to make money out of it.  Some are fed up with their employers and want to be their own boss. Many people want flexibility so that they can decide for themselves their own working hours.

Others want more free time to spend with the family or play golf and have fun. There are many more reasons than we can mention here.

Starting a business is a really good idea. However, statistics from Small Business Administration (SBA), only seven out of 10 businesses survive at least for two years.

Starting a business may sounds like the perfect solution for you, but unless you’re committed to it and determined to make it work you can quickly make great losses. Explanations for failure include:

 1. Starting a business with wrong motives

Some people start their business with false hopes that they will have much money and a lot of free time. The sole motive for starting your business should not be to make tonnes of money or having extra time.

Many times when starting business you are going to be worse off monetarily because before the business is running you will incur much expenditure. Also a new business will demand a lot of time and energy and commitment.

 2. Poor Business Skills

Many report show that people who want to start their own business often lack proper training. New business owners frequently lack relevant business and management expertise the essential areas such as hiring, business financing, employee management and product marketing.

Therefore, unless they receive proper training their businesses will be quickly ruined. When a business is neglected then it will surely fall. One must study in detail all the aspects of the business and carefully organize and plan its operations.

 3. Bad Managerial Skills

Research has shown that poor management is often the reason most business fail. The owners often lack expertise the much needed business management skills. A good manager should be baker to create good working conditions that encourages employers to be innovative and efficient.

The manager should also have good people skills so that he can hire the right people for the job, not necessarily those who qualify. The manager should also be a strategic thinker with a vision and a determination to realize the vision. Without a good manager to take care of the business, it will just crumble like a pack of cards.

4. Poor Planning

Starting a business without a plan is another major reason accounting for failure. Many people impulsively start their business without giving much thought to planning.  Anyone who has a successful business knows that if they had not worked hard planning carefully, methodically and strategically then success would not have been guaranteed.

It is very important that anyone who wants to start a business have a realistic business plan. It must be realistic and based on accurate information with an informed projection of the future. Almost all banks require a good proposal before financing any project.

5. Poor Advertising  

After setting up and running a business, marketing has proved to be a huge hurdle. Most of the businesses that fall had either poor or absolute lack of adverts. This is due to lack of business skills or they have exhausted the funds. At the very least, every business should have marketing and an advertising strategy.

Advertising is like a double edged sword that will make your business look good or bad. A professionally designed website, street ads, TV ads should be made to inform the public on their products and services.

There are just a few of the many reasons why businesses fail. It is therefore essential to find out these reasons are for your specific line of business before setting it up. Be, methodological, strategic and careful in research.

Leave to chance only that which is necessary and your business will likely flourish.

This is a post by Smarta. Looking to start a business? We can help you write a business plan! 

Photo Courtesy Of Stephan King