5 Important Reasons – Why Small Businesses Fail?

Thursday, 27th October , 2016

Share Button

The following are the reasons that lead to failure of most small businesses.

1. Insufficient Capital:

Most business owners don’t make an accurate estimate about the capital needed to meet various financial requirements of the business in the beginning. Some of them have unrealistic expectations of incoming revenues from sales and don’t raise an adequate amount of capital for their start-up business.

How to Manage your Finances Efficiently?

Since every business needs time to grow and get into full swing, it is advisable to gather enough funds to cover all costs and avoid situations that may force you to shut down your business.

There is professional accounting software that can help you keep a record of all financial transactions (expenditures and revenues) and also generate profit and loss statements. You can even consult professional financial planning advisors for good financial management.

 

2. Lack of Business Planning:

A solid, clear-cut and realistic business plan is must for a business to turn into success. A good business plan not only helps to figure out short-term or long-term goals, but also helps create a fine balance between the two.

Planning gives direction to your enthusiasm and channelizes your energy in the direction that would bring success to your business.

How to Get the Perfect B-plan for your Start-Up Business?

The best thing you can do is to hire a business planning consultant to design a roadmap for your business. A good business plan should include description of the business, vision, goals, work force requirements, problems with solutions and keys to ultimate success of the business.

 

3. Not Understanding The Customer:

Your business is likely to experience a setback if you don’t understand your customers’ wants and needs. For this you need to stay in direct touch with the customers and also ask for their feedback.

Feedback from your customers is a valuable advice that will help you to know whether your product is still capturing the market or requires modifications.

How to get Feedbacks from Customers?

The best thing you can do is to do timely surveys to know what their interests are and figure out changes required in your present products and policies. You can use customer relationship management (CRM) tools to maintain touch with your customers.

 

4. Not Understanding the Market:

If you want to open a real estate agency, but you ignore the fact that you are in area which is already flooded with agencies, this is like inviting failure on your own.

This is a mistake many start-ups    do. They fail to figure out whether there is a scope to grow in the present market scenario. They are simply blinded by their passion which leads to quick failure of their business.

How to Investigate the Market?

If you are planning to setup a business, you will have to find an unmet need within a market and then work to fill it instead of forcing your services. As a startup, you should work to satisfy a need instead of creating a new one.

 

5. Over-expansion:

Most business owners think a business is successful only if it expands quickly. And here they fail. The aim of the business should be slow and consistent growth instead of fast and inconsistent results. Overexpansion will only lead to bankruptcy.

How to Avoid Problems with Growth and Expansion?

Even big commercial franchises such as fast-food restaurants study and analyze before they plan to target a new location. So, every startup should also research about local and regional demographics, latest trends, and future scope before you take a step towards the expansion.

1,057 thoughts on “5 Important Reasons – Why Small Businesses Fail?

  1. Viagra Eis [url=http://cure-rx.com]cialis 20mg price at walmart[/url] For Sale Generic Legally Dutasteride Mastercard Accepted Store Chicago Priligy Precio 2012 Kamagra Effets Secondaires

  2. Priligy Peru Farmacias Keflex Kefzol Class Of Antibiotics Comprar Viagra Con Mastercard [url=http://oc-35.com]cost of propecia ireland[/url] Is Cephalexin Used For Abscess Tooth Buy Over The Counter Prednisone Pills

  3. Priligy Quand Prendre [url=http://realviaonline.com]cialis 40 mg[/url] Generic Lasix Online Causes Of Leukemia By Antibiotic Amoxicillin Buy Xenical No Prescription Uk

  4. Propecia Dias Fertiles Cialis Price Drop secure ordering isotretinoin with free shipping saturday delivery price [url=http://buysildenaf.com]viagra[/url] Accutane Buy Online Reviews

  5. Kamagra Prix En Pharmacie Comprar Viagra Original Barcelona Amoxicilina 650mg Discount In Us With Free Shipping [url=http://cialibuy.com]Buy Cialis[/url] What Is Amoxicillin Antibiotic For Bentyl Diciclomina Spastic Colon On Line Cafergot Tablets Nz

  6. Utilize as dicas desta peça a fim de aprender métodos de marketing especializados que podem ajudá-lo a se relacionar melhor com seus clientes através de técnicas de e-mail e outras estratégias personalizadas.

  7. All you need to do is make an order on our very easy to use website and give specifics such as the length of the speech, topic and of course the date and time you expect to have it ready.
    college paper writing service reviews They never compromise on the quality, this is one of the reasons why the students employing their custom paper help pass their course with flying colors.

  8. By contrast, most online casinos offer a free roulette game so amateurs and those new to online roulette can practice before playing real money roulette.
    free casino no deposit In light of the coronavirus spread and subsequent wave of sporting event and other event cancellations, online gambling is likely experiencing a spike in traffic.

  9. College essay on whether college is worth its cost negative effects of smoking cigarettes essay, essay on law education essay writing competition 2019 uk, essay thesis maker short essay about purpose, leadership theories essay. write my paper for me Wedding speech order and toasts writing services laurier online paper writing help best write my paper websites best resume writing services for teachers quotes.

  10. In this regard, therefore, we are a reliable service since someone can pay and bank on us to go through the work once more to polish it in areas they feel have not been adequately handled. paper writer Also having procedures for running difficulties that surface wanted to arrive at a conclusion about that a lot of will not have to have to grapple with.

  11. Different universities have different criteria to be met by the students in order to get admission in the universities or colleges for making higher studies. write my paper for me Essay on biography of a tree in hindi free essay examples for college essay on health care in the united states essay writing topics kaziranga national park, very small essay on holi.

  12. Wir haben zwar noch nie was zusammen unternommen ich war immer nur bei ihm habe schon hunderte male bei ihm geschlafen. gmcourseonline Vielleicht kennt er dich sogar gut genug, um selbst zu merken, wenn etwas mit dir nicht stimmt, auch wenn du das nicht voraussetzen solltest.

  13. Frauen suchen will, sondern dass er sich einfach nur ganz sicher sein will, dass er das wirklich will. frontechnigeria.com Other miners have been quietly writing puts at strike prices below the market, in the hopes that they will become long gold on pullbacks.

  14. Mit stark meine ich hier, dass sie sich stets bewusst sind, wer sie sind, woher sie kommen und wohin sie gehen. fron tech nigeria I tried to introduce an adult to programming, she got frustrated, and eventually demanded to know what the goal was.

  15. Fantastic well presented country house with extensive accommodation set in spacious gardens and grounds. favoures.com Poznakomivshis s etoj knigoj, vy uznaete, kakie sobytija ozhidajut vas v 2017 godu, kak slozhatsja dela, kakie dni budut blagoprijatny dlja razlichnogo roda nachinanij, kakie net.

  16. Architecture and to what extent they advance the development of architectural aesthetics and the built form. thewriteacademy Japanese concept applied to all kinds of traditional arts and crafts, from tea ceremonies and martial arts to the structure of music, poetry and theatre plays.

  17. Takt zu halten, aber wenn es angemessen ist, schneller zu werden oder langsamer, kann er auch dies bewirken. muahangtaigia At the fete the normally dramatically dressed-up diva was surprisingly low-key, sporting a minimal makeup look, bleached eyebrows and a nose ring.