Starting a business is a risky endeavor.
But knowing does not stop many small-business owners. Every day owners open the doors to their business. Some end up satisfied with the results but many others decide, at some point, to close the doors.
The reasons for such closures are often not a secret. Talk with any business owner who has been through it and they will often give you all of the details on what went wrong.
Yet, we often don’t take the time to listen and learn.
So what are some of the reasons that a business does not thrive.
- Lack of homework. As noted here, owners don’t “look before they leap.” They don’t understand the risks nor have they checked out what the market wants. Quite often their motivation to sell something they have a passion for or what friends and neighbors tell them “everyone will buy one.”
- Estimation of profitability. Is there a reality-based plan with true market potential, true and market-tested pricing, and a solid cost structure? The profitability start-up curve is often much longer than that planned. Estimate when you will make money and then back it up twice or three times as far.
- Inadequate cash cushion. Everything takes longer than planned and costs more than expected. This is considered the number one reason why businesses close the doors.
- Management issues. Know your strengths and your limitations. Get help where needed. Also, be sure to stay on top of the accounting. Don’t buy unneeded equipment. Rent or time-share or even barter for what you need. Buy used. When starting know everyday what your bottom line is.
There are no guarantees of success when you start your business. So why not give yourself the best possible chance. Learn what your biggest risks are and do everything you can to be prepared.
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- Learn From the Mistakes of Others - August 8, 2018
- First Impressions - July 25, 2018
- The Old Market Methods Still Work - July 18, 2018
- Building a Team - July 11, 2018
- Enjoy the Holiday - July 3, 2018
- It’s the Little Things - June 27, 2018
- Fill a Need with Your Business - June 20, 2018
- Is This Service? - June 13, 2018
- Customer Retention Pays - June 6, 2018