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For failure there are some reasons common to most businesses. Knowing them you are much less likely to commit the mistakes and fall victim to them. About seventy percent of startup businesses are said to succeed and survive at least two years, and less than fifty percent survive four years or more, whereas a significant percentage fail. Not knowing and avoiding some failure key factors will surely weigh down your business.
2010 VCgate Venture Capital Funding search TIPS FOR AVOIDING BUSINESS FAILURE Tips for Avoiding Business Failure For failure there are some reasons common to most businesses. Knowing them you are much less likely to commit the mistakes and fall victim to them. About seventy percent of startup businesses are said to succeed and survive at least two years, and less than fifty percent survive four years or more, whereas a significant percentage fail. Not knowing and avoiding some failure key factors will surely weigh down your business. Here are some useful do’s and dont’s: 1. Don’t start with insufficient operating funds If you underestimate the amount of money you need, and some entrepreneurs do, you will be forced to close before even seeing a glimpse of success. The costs of starting will not be the only financial concern, there’s also a need for capital for the next rounds of your company’s development. Do try to find the right investor if you don’t have enough funds, such as angel investors or venture capital firms . They will provide you not only the necessary capital, but also expertise and advice, as they have enough experience with similar companies in their portfolio. 2. Don’t make a poor business plan Strategic, methodical planning is like drawing your roadmap to success. And, just like a roadmap, a good business plan includes more options that take into consideration future possible changes. Therefore, there should be both a best and a worst case scenario. Moreover, if your business plan is appreciated and you receive funds from the desired business investors, don’t toss it in a drawer. It needs to be continuously updated and adjusted, as the market keeps changing. Instead, do describe your goals, work force needs, sales and expenses forecast, analyze your competition and potential problems and solutions. 3. Don’t hire inexperienced managers If you are young and lack experience in managing a business, or if you hire a beginner for the sole reason you don’t have to pay him well, it’s possible that poor management will be the cause of your company’s downfall. You need expertise and regular study in finance, selling and buying, production, hiring employees. If you want to hire a manager, make sure you choose the right person, a skilled leader with strategic thinking, able to face risks and challenges and to find solutions in times of crisis. 4. Don’t disregard the importance of location If you don’t study your future location carefully your customers may not come as expected and the chances of success will be lower. A bad location could negatively affect and even spell disaster to your business, whereas a good one may help you thrive. Do some research to find out where the target customers are, how accessible the place is (car parking, accessibility for pedestrians, proper lighting), what the location of competitors is. 5. Don’t think marketing is a waste of money As you will probably not be the only one in your sector, you will need to show your potential customer the advantages of choosing your product or service. And even if you may be the only one, future clients need to find out about your idea and the way it will fulfill their needs. If you don’t use advertising constantly, you may be losing business to those they do. For the beginning having at least a website that is well-designed and professional looking will recommend you to your customers and help them discover the features and benefits of what you sell them. On its way to success your business should be clearly focused, understanding the requirements of customers, the strategies of competitors and the employees’ needs, prepared to handle any problems that may arise in the future.
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