Almost everyone starts a business because they want to make profits. You want to turn your little money to more money. But then, business is all about profits and losses. You win some. You lose some. You learn your lessons. Life continues.
As easy as it sounds, no matter how experienced you are, no one starts a business to lose money. But, losing money is inevitable in business. It will happen when it will happen. And this single factor has ruined several businesses.
A business can fail for several reasons. Some reasons can be explained while others reasons are better left unsaid to avoid more confusion. Here are some of the top causes of business failure you should avoid now:
1. Having a vision without a plan.
Every business person has a vision for their business. For the big entrepreneurs, their vision is well-articulated and documented. This may not be the case for the small businesses, but at least, they have an idea of how successful or how big they want to be. That is their vision.
This problem of having a vision without a plan is, most times, peculiar to small businesses. For example, if you own a gym center and will like to turn it into a franchise by the year 2020, If you are really serious about it, then you must draw up a realistic plan to actualize your dreams.
Your plan does not have to be in 20 or 30 pages. A page or two containing your goals is enough. The most important thing is that you follow through with your goals. Stick to your plan and make adjustment only when necessary.
2. Hiring the wrong people.
You have to be very careful of the kind of people you choose to run your business with you. If you bring in the wrong person or people, your business will die. If you bring in the right person or people, your business will thrive. It’s as simple as that.
Nothing kills a business faster than people with the wrong skills and attitude. Never employ anyone you cannot manage or control. Some family members and close friends fall within this category. The worst part is, after hiring them, you may not be able to fire them.
Do a background check on your prospective employees. After they must have convinced you at the interview that they are the best candidate for the job, you still need to find out more about them before you hand them an employment letter.
If you fail to do this, you may be employing someone who will kill your business or do worst to you if you’re not careful.
3. Not believing in your idea.
Yes, not believing in your idea is one of the causes of business failure. I have met entrepreneurs who do not really believe they will succeed. For your business to succeed, you must first believe in yourself and your abilities to succeed.
If you take a look at all the successful entrepreneurs you know today, in almost all the cases, they were the only ones who believed in their ideas. Having a strong believe in your business can be the difference between your chances of business success or failure.
4. Lack of innovation.
An entrepreneur is an innovator. You can’t be doing the same thing and expect different results. An entrepreneur wants something different from the status quo. Hence, they do things differently from how they were previously done.
Lack of innovation is a business killer. Doing the same thing and expecting different results is the reason you see someone selling the same product, the same way for years without any improvement. No new branches, no business growth, nothing. Be innovative and you’ll see positive changes in your business.
5. Fear of failure.
Fear is another business killer. It’s also what prevents entrepreneurs from being innovative. They are scared of the results of their action.
“No, if I do that, I may lose my money.” A true entrepreneur fears no failure. In fact, most of the successful entrepreneur you know today, have failed in their previous business ventures.
Do your research and see the figures for yourself. Failing in one business is not the end of life. Except you’re the type that does not learn. The lessons you learn from your failed business could be what will make you successful in your next one.
If you can avoid these factors, then you should be able to build a successful business in no time.