According to statistics published in 2019 by the Small Business Administration (SBA), about twenty percent of business startups fail in the first year. About half give up within five years and within a decade, only about 33% manage to survive.
1. Common Reasons for Startup Failure
While there are a ton of reasons why small businesses fail, very often, it is because they made some common mistakes.
The business was started for the wrong reasons
The right reason for starting a business is having something you are passionate about and what you strongly believe in. You are determined to make it work and you are committed to your goal. You view failures as an opportunity to learn and improve. You thrive on independence. If any of these puzzle pieces are missing, odds are the business is doomed to fail.
The market is too small or non-existing
You need to ensure that a market for your offerings exists and that it is profitable.
Poor management
For a business to keep living, its owners must regularly study, organize, plan, control, direct and improve all business operations. A good leader is the captain of the boat- without a captain, the boat can end up anywhere.
Lack of funding
Many small businesses are forced to close before they even have a fair chance to succeed. This usually happens as a result of underestimating how much money is needed to get the business up and running.
Fast growth
Many bankruptcies came as a result of companies expanding too fast. Slow and steady growth is the safe way to go as action must come as a result of careful planning.
Lack of presence
If you don’t have a website or are present on social media, it’s like you don’t exist.
2. Characteristics of Successful Businesses
Here are some characteristics of successful businesses.
The people
A company is only as good as its people and a true leader sets a tone for others to follow in a healthy structure where everyone feels acknowledged.
Focus on quality
A successful business dedicates its resources to constantly provide quality service and products, without exception or compromise.
Appreciating the customer
Besides ensuring the quality of products and services, a successful business nurtures the relationship with its consumers. It listens to them and reacts upon their feedback, receiving loyalty in return.
Strong finances
Finances are the ID of a company’s health. A company that stays on top of its finances is able to blossom when an opportunity presents itself as well as survive the storm.
Adaptability
One thing is certain: there will be rough patches and how you handle them will make or break your business. Successful businesses bounce back quickly from setbacks and return even stronger.
3. How To Grow a Successful Business
Being an entrepreneur means carving your own unique path, but there are many universal things you can do to set your business on the right track.
Cut unnecessary spending
If your Scana Energy bill is higher than usual. it would be wise to look for other affordable providers in your area. Look at price comparison websites and make sure you are getting the best rate for your utilities and your insurance.
Keep your eyes on the prize
The prize is your vision coming true. When things go south, your vision will help you steer yourself back to a successful course. Your vision is your compass and beacon that will light the way forward.
Only go forward
Your vision needs to be fueled with perseverance. If you fall, get back up as soon as possible and keep going forward.
Make a plan, but be flexible
Your business plan is your roadmap, but life happens as we make plans, so you need to be able to alter the course as necessary.
Don’t reinvent the wheel
Don’t waste time reinventing things that already work but focus on improving things that don’t work as well.
Don’t forget to take care of yourself
You will burn out if you sacrifice your physical and mental health for the sake of your business. Think of it this way: taking good care of yourself will help you be more productive and do better, which will benefit your business more. You cannot pour from an empty cup.
Takeaway – Everyone who starts a company wants it to be successful yet less than half of them succeed. However, knowing the common reasons of failure will help you avoid them and increase your odds of success.