Top ten reasons why start-ups and small businesses fail.
A sad fact for most start-up businesses is that they are destined for failure. Statistically, an extremely high percentage fail within the first twelve months of opening their doors. It's unfortunate to see so many people who have invested time, energy, dreams and cold hard cash into a venture only to see the doors prematurely closed.
We hate to see this happen so we've put together our Top Ten list of why start-up and small businesses fail. The list isn't in an chronological order nor is it complete, but it will give you an indication of the many pitfalls.
Take a few moments and review the list. Be brutally honest. Does anything on the list apply to your business? Here we go:
1. Unqualified and or poor management
- Management disputes and a general lack of team sprit quickly erodes the bottom line.
2. Poor pricing
- Getting the price right for your goods and services is intrinsic to your success in the marketplace.
3. Poor budgeting
- This is a killer. Failure to recognize the realistic needs and delegate an adequate budget for your enterprise will rapidly drain financial resources. (see negative cash flow).
4. Negative cash flows
- In simple terms this means that there's more money going out than is coming in.
5. Unrealistic forecasting
- Another killer. It's easy to say you'll sell a gazillion widgets in the first quarter, but in reality, can you? A good forecast model is based on reasonable set of assumptions and not just personal feelings. Be reasonable and be realistic.
6. Weak marketing plan
- If your marketing plan is "open the doors and the customers will come" you're in serious trouble. An effective marketing plan can not only make you money, it can save you money by avoiding costly mistakes.
7. Poor client service
- - If you don't care about your customers, why should they care about you? Making wrongs right can earn you a lifetime of customer loyalty and give you an edge over your competition.
8. Poor and undesirable packaging
- Can't judge a book by it's cover? Perhaps not, but people do. Shoddy packaging telegraphs to the consumer to expect a shoddy product inside.
9. Poor understanding of the target market and the competition
- HHow do you expect to sell anything if you don't know who you're selling to? Do you know what your competitors are doing - You'd better, because it's virtually guaranteed that they know what you are doing.
10. Poor quality product
- To quote the common vernacular, this should be a no-brainer. If you're in business to peddle a poor quality product, you seriously should consider why are you in business in the first place. You'll probably save a lot of money by not opening your doors.
So, how did you do? Did you see anything that relates to your business?
Regrettably, at Diemention2, we see these challenges everyday. The good news is that we have the expertise and experience to fix most of these problems before they become disasters. All it takes is one phone call to receive your initial complementary consultation and we can start to move you forward. The last thing we'd like you to do is ride the fast track to failure and just become another statistic.
Call us today at
416-865-3385 and let's talk about your business.