The Well-Known Reasons Why Businesses Fail…Do Something
Written by Davide Scalia on Dec. 05th, 2019
Starting a business is hard, but what’s even harder is growing and keeping it running.
Expanding a business is something not many enterprises can do and only a few can achieve. Here are a few reasons why businesses fail, see if your business is doing one of them.
Poor Leadership
One of the biggest reasons why small and big businesses fail is the lack of effective leadership.
A good leader should know exactly how to make the right decisions at the right time. A good leader should also know when to delegate and let other people take control. One of the most important qualities a good leader should have is the ability to listen and take constructive criticism.
Different opinions from different backgrounds are more important and contribute to the business. This is why a good leader should always listen and act accordingly.
Not Prioritizing the Customer
Many businesses believe in putting the customer first, but don’t actually do it.
Prioritizing the customer is more important than you think. Customization and making the customer feel like they are important are all qualities that a good business should have.
Customer feedback should always be taken into consideration since businesses can actively use it to improve their conditions making sure you are keeping up with the market to produce something that is in demand.
Lack of Good Management
This is one of the more important ones. Businesses that have a huge communication gap amongst employees are bound to fail.
It is important to communicate and discuss your issues and unfortunately, businesses like these are also most likely not willing to learn from their failures.
It is so important to learn from your mistakes and try to do something different each time around when you refuse to learn the fail is very close.
A good business should have effective communication between the employees and the ability to bounce back.
No or Lack of Capital
Another most common reason for a business to fail is the lack of capital. A business can be started with a certain amount of capital, but what investors fail to realize is that a business needs a certain amount of capital also to continue running.
Eight to ten months in, several businesses are bound to fail because investors run out of money due to several unexpected and hidden costs.
It is important to make a clear plan in advance to avoid bad surprises, especially for investors.
Lack of Profit
The most simple and direct reasons why a business might fail is the lack of profit generated.
Businesses might continue to achieve their goals, but they might not be generating profit. After a few months, a business can tell if they will make a profit or not.
If there is no hope for profit in the future, it is very likely that the business will shut down. Businesses also need to pay off loans and rent, so shutting down the business would be the only smart decision.
These are the reasons why businesses fail, hence, to avoid such situations, make sure that your business doesn’t lack in any of these areas and do something now.
Thank you for reading, I would appreciate hearing your thought on this.
Davide Scalia
CEO & Founder of Namaka Consulting, with over 15 years of experience in the Marine Industry and over 10 years experience on Strategic Business Development, helping over 500 businesses to clarify what to do next, increasing sales, giving new ideas for exponential Business Growth
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