Remember sometime ago when I gave you some of the reasons why most new
businesses fail in an article sometime ago? Well I bring you the complete edition of the article. Just as I said, it is always
very difficult to start and maintain a new business because you are not sure of
what you are going into thereby creating the least bit of security for yourself
and money. Here are some other reasons why your business fails; read and try to
avoid making such mistakes:
GOING OUT OF CASH
Running out of cash is another thing that kills new businesses even before your break even or breakout. This often happens when you fail to invest money on capital expenditures for your business. By Capital Expenditures, I mean land/shop, equipment, raw materials, goods etc. Be aware that these expenditures earlier mentioned are the most important things you need to secure first for a lasting business. However, there'll be some recurrent expenses (workers' salaries, power, & transport bills) that you must cover aside from the capital expenditure which depends on the kind of business you want to establish.
If you fail to provide for those capital expenditures before your business breaks even, you are likely to start accumulating debts which will cause a great run down of your business. Before you launch your business startup, after doing all your capital expenditure, you should set aside enough money to cover at least six months of recurrent expenditure.
Running out of cash is another thing that kills new businesses even before your break even or breakout. This often happens when you fail to invest money on capital expenditures for your business. By Capital Expenditures, I mean land/shop, equipment, raw materials, goods etc. Be aware that these expenditures earlier mentioned are the most important things you need to secure first for a lasting business. However, there'll be some recurrent expenses (workers' salaries, power, & transport bills) that you must cover aside from the capital expenditure which depends on the kind of business you want to establish.
If you fail to provide for those capital expenditures before your business breaks even, you are likely to start accumulating debts which will cause a great run down of your business. Before you launch your business startup, after doing all your capital expenditure, you should set aside enough money to cover at least six months of recurrent expenditure.
FAILING TO GET THE RIGHT TEAM
When you start a new business and fail to assemble the right team that will help to make your business work, you are likely to have a failed business. At one point of your business, you will need help in making decisions, but most help is needed when the business is a large or medium scale businesses. This is because you will need people to handle the core areas of product development, marketing, and management. The business is not likely to succeed if you don’t have experts handling any of the core areas.
When you start a new business and fail to assemble the right team that will help to make your business work, you are likely to have a failed business. At one point of your business, you will need help in making decisions, but most help is needed when the business is a large or medium scale businesses. This is because you will need people to handle the core areas of product development, marketing, and management. The business is not likely to succeed if you don’t have experts handling any of the core areas.
Problem is that people tend to hire family, friends, and relations
without checking to see if they will bring any tangible value to the table. The
business is also likely to suffer if there is interpersonal conflict between
the team members. Hence, it is important to hire people with the right skill set and to make sure that they don’t have differences that could lead to acrimony.
SELLING POOR PRODUCTS
You should know that your business is your bond and that whatever you give to people is what they will know you for. That is why it is always advisable to give your customers good products that they will appreciate and come for more after their first experience with it.
You should know that your business is your bond and that whatever you give to people is what they will know you for. That is why it is always advisable to give your customers good products that they will appreciate and come for more after their first experience with it.
Also remember that the business world is a world of stiff competition,
and if your business has a competitor who has superior products, your business
may be in danger.
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