Reasons Why Some New Businesses Fail (Part 1)
Many of you may be planning to start businesses, with some of you already running them. Thus, it shouldn’t be surprising that the interest in increasing one’s chances of success is becoming a priority. It only makes sense for aspiring entrepreneurs like yourself to study what others did wrong in the hopes of avoiding doing the same. And that’s where this article comes in. Below is a list of factors that impact and are some of the reasons why new companies never really get off the ground.
No Competitive Advantage
Legendary CEO Jack Welch once said, “If you don’t have a competitive advantage, don’t compete.” Launching a new business may sound cool and exciting. But if your business has no differentiators (i.e., something that makes it unique), you’re not going to last long since you’re selling something people could have bought elsewhere. Instead of selling something generic, try being more innovative, leveraging new resources and different approaches to introduce your brand in such a way that can make it stand out.
No Strategy
Even if you’re not the have-a-business-plan type of entrepreneur, you can appreciate how crucial a plan is for your endeavors. It’s called a strategy, and your new business is doomed to fail without it. Your strategy will help you to deal with the competitive market, as well as with how you behave in times of prosperity and in times of crisis. It’s the foundation of all your decisions and it allows you to keep track of how well you’re performing. Know where you’re going and what steps you need to take, and you’ll gradually see your efforts bearing fruit.
Poor Understanding of Customer Needs
One of the best things you can do to doom your business is to ignore your customers. You’d be shocked at how widespread this issue is. Anyway, listening to your customers is an invaluable practice that can allow your company to mature, learn, and adapt. Customers are constantly offering feedback and suggesting what they would need in order to better fulfill their needs. By always keeping the customers in mind, you’ll be able to generate valuable products that would ensure your entrepreneurial success.
Wrong Partners
Partnerships are always difficult, especially when you and your business’ co-founders complement each other but later grow to have different drives and priorities. Humans are complex beings; our desires and focus shifts as time goes by, influenced by an array of variables. So imagine being a year into a project and finding out your partner no longer feels the fire you do about this business. Or they simply have a different idea of what the business should look like. You’d both eventually go your separate ways, with the likelihood of either your successes going down the drain. And that’s the mildest of outcomes! It’s hard to go on a business venture alone, but if you can, we definitely recommend it.
Stay Tuned
The four mentioned above are just some of the factors that can lead to your business’ demise. There are other things that can cause business failures. If you want to know more about them, then best stay tuned for the next part.
