You are doing your ‘best’ to survive in your business. You have made a handsome investment, done good in marketing, have a trail of experience, and took an impressive office at the business hub of the city with smart interiors, a lucrative website, a catchy business card, and a long queue of prospective customers. Still, you are facing difficulty to emerge significantly. Your business growth is not mentionable.
Reasons for small business failure
What should you do right at this point? This blog is going to give some solutions for the survivors to make a successful U-turn from a bad situation in their business. Know about the silent killers of business success and how to destroy them. Let’s have a look!
1. Not tracking your business
Not tracking the business properly is one of the reasons for small business failure. Think about a cowboy. He has hundreds of cows, that he takes away to the plateau to feed up regularly. The cowboy has no counting about how many cows he has actually. He has not even had enough rope to tie the cows up well and control them on his own.
It is supposed to be a good business, but in fact, it cannot thrive. Some of his cattle loiter away to graze here and there. Finally, these are lost randomly. The cowboy can’t track them well, therefore his number of cows is decreasing day by day.
Now relate this example to the business you are running. You assume it should be going well. But, unless you do not set control and track your business activities, it won’t work well. Track every possible area you come across on the way of your business journey.
All your supply chains, accounts, human resources, and consumers should be under your tracking. Initially, it can be done manually, but you should go for automation in every possible area appropriately. Your mobile, apps, or software can be handy.
To save money, you can develop your manual or even an Excel sheet by any expert. The tracking should be accountable for your everyday activities, big or small. You do not know what small things would be proved costly in the future.
2. Not running on a system
The earth moves around the sun. It has a fixed speed and distance it covers at a specific time span. Day and night come one after another, which never overlap each other.
The other planets are following their ways all the year-round. It is the system of the universe that keeps it smooth all the time. This is the perfect system that keeps the earth and all other particles of the universe as perfectly as possible on its goal.
Think about our human body. It is okay as long as the internal body system runs well. When the system crashes, we face sickness of many kinds.
Business is no different than this. It should have its own system. Every successful entrepreneur runs her business in a systematic way. If you don’t have a system, you should develop it. Without a proper system, any business must collapse sooner or later.
Check out whether your business runs with proper procedures and policies or not. You should have the required software, and modules to make your system, there should be an updated accounting system to operate your earnings, profit, loss, receivables, etc.
Keep your HR system okay to fix the roles and responsibilities of your manpower, and also check all activities are running according to the system. Are your employees maintaining office timings? Do your marketing campaigns have a proper schedule? Adopting technology is a good way to develop a system easily.
You’re going to reward tour promising employees for their extraordinary performances, according to your system. If something goes not as per your day-to-day system, you must rely on your recovery system. The summary is that as systematic as you are, your business goes better and better.
3. Not having a predictable schedule
What is your plan this year to travel? How much money do you plan to save? What have you listed down a product list you are going to purchase? What are anniversaries you are going to wish your dear ones? Like a well-planned person, I am sure you have your personal schedule up to date.
What about your business? Have you predicted your business schedule and planned how to handle them? Yes. Whatever the process of documentation is, every business should have a predictable schedule for the future. Not having a predictable schedule is one of the reasons for small business failure.
The schedule can be long-term and short-term. I prefer to go with a long-term schedule segmented into many small schedules. What products are you going to launch in the next 3 months or 6 months? Which clients are you going to handle in the current month or next month? How many sales you have targeted by the next 2 months or four months?
Keeping an updated schedule for your business, and maintaining as much as you can match up, will be good enough. A schedule is a driving force that triggers a businessman to achieve it. What if you can’t keep all of your schedules?
The good thing about keeping a schedule is, that in case you miss some of them by the projected time, your next goal will surely be on the list. When you cannot keep all of your schedules, you can analyze the reasons behind, them and recover the next.
4. You’re too cheap
The word “cheap” has many implications in business. Business is all about winning the emotion of the target market. It is to position in the heart. Turn a one-time customer into a permanent customer. Create a unique brand identity for the target group. Set a class impression. And, becoming cheap can be enough to spoil everything you gain.
What is being “cheap” in business? When an entrepreneur undergoes stuff as follows:
- Products that are already superfluous in the market.
- Price of the products as cheap as possible (lowest in the market)
- Make a cheap marketing campaign in a cheap (that has no class) medium.
- Hire cheap, unskilled manpower to save money
Source cheap, low-quality supply chain
- Nurture cheap business ideas
- Set a cheap office space in a low-quality area
- Get a cheap website domain with cheap and unattractive design and erratic content
- Target cheaper market
- Unplanned business planning and execution come out from cheap brains
Avoid being any of these to be a successful entrepreneur.
5. Not having protocols for everything
There should be a sequence of everything. Life has a pattern, it has a decorum. When you start your dress up with a suit and end up with undergarments, what does it look like? Is it the chain of command?
There should be a specific goal for every action associated with your venture. Who should be doing what is to be pre-decided? Action and plan should proceed sequentially. When you maintain a protocol for everything, you get leverage on your objective. Know about the silent killers of business success and how to destroy them.
6. No deadlines
Life itself has a deadline. We are approaching death and one day the end of our lives will be appearing. Setting a deadline is a natural rule. It is an awakening of specific triggers that help to execute any job on time. Having no deadline for action is one of the reasons for small business failure.
In the case of a product, there is a depreciation after a certain period of time. When you fix your deadline to finish any job on time, you feel an urge in your heart to finish. Finishing your assignments reaches your objective. You can have your other jobs done as well.
The business should have a deadline to finish any job. Time is valuable. You are not in a situation to let your valuable time in vain. Make your every moment fruitful. Meeting deadlines on small assignments will be a good indication to think and achieve big.
To achieve your short business goals, there is no other way but to set and meet the deadline. Large business goals are part of many small goals. These are crucial factors for your business success.
7. Rarely hitting goals
Sometimes, hitting a goal is much more meaningful than achieving the goal. For a successful business, there should have achievable goals. Having continuous goals (and achieving them) keep a business rolling. What is your business goal this week?
All of your business departments should have their individual goals. Check out what goals are set this week from your business sections- marketing, accounts, HR, product development, training, production, sales, web, research, public relations, IT, and planning. Are these achievable? Do your business units hit these goals?
8. React instead of initiate
Learn to absorb criticism. Show your openness to opinion and recommendations. Feedback is important to rectify your business ideas. Opinions are important for improvement. Some businessmen cannot stand criticism, outbursts come across as a part of the reaction. It’s not fair. Learn how to develop a successful negotiation strategy for your business.
Initiate your action. It is far more productive than showing a reaction. Count your criticism as the trigger for your revenge. Sweet revenge to improve your position, not by reacting, but rather by initiating.
Starting in the very first step of finishing. When you will be reacting, instead of doing, your goal will never end. As an entrepreneur with a big picture in mind, I am sure you don’t want that. Know about the silent killers of business success and how to destroy them.
9. Lack of priority
Every action is not equally important. Setting the priority of your actions is a good thing to be on track, to be systematic, and to bring outcomes. Realize the urgency of your action. While setting the there must be the set priority of your sub-tasks. Vision can understand what is urgent and what is not.
It happens in case you need to accomplish multitasks. Calculating the impact of profit, loss, volume, and or impact are good factors to determine urgency as one of the reasons for small business failure. Timing is a good trigger to fulfill urgency. Value your time. In a cricket match, timing is above all other tricks and techniques to batter the ball with the bat to score a sixer.
What you can do now should not keep pending for the other day, in case you sense it as an emergency. You don’t know who else will take the chance today and surpass your efforts. In case it’s urgent to meet your clients than having a meeting with your teammates, do that.
Some businessmen can’t read what matters are urgent and what are not. They always lag behind and eventually leave the business by blaming their fates.
10. Unclear vision and goal
I know a person who is very unstable with his decisions. Three of them started a business selling showpieces. It was a good one. After five and a half years when we met again, he was found in a photography business with other partners.
When I dug deeper, he told in the last 5 years, he changed 3 businesses with 3 groups of partners. As usual, the business was not going well. The reason behind this imminent failure was nothing but his instability in goal setting. He didn’t know what he wanted! He was a man with confusion and dilemma. This important personal trait negatively affected his business career.
Don’t cultivate this blunder! It is you who should know the best what you want. Don’t listen to others. Talk to your soul to have your answers:
- Is this the business of your passion where you are in?
- Can you stick to this for at least 3 years consistently despite any obstacles that may come across?
- Have you set your month-by-month and year-by-year goal in business?
These questions you should consider with authentic answers to decide your days to come. Know about the silent killers of business success and how to destroy them.
11. No desire to learn
Life is a continuous learning process. There are many ingredients in nature, in persons, in incidents, and in examples around us. These are the indications of life. Who can learn from her surroundings, can distinctly make her life differently from others.
As a businessman, you should have a tendency to learn from the environment. Sometimes you have to learn from others, sometimes by doing mistakes in your life.
Whatever the situation, learn. Consistent learning will grow your expertise, you turn experience. Learning has no alternative to shaping yourself up. And there is no end to learning. Know about crucial life lessons people learn too late. Know about the silent killers of business success and how to destroy them.
You can learn from your mentors, your competitors, and other businessmen with whom you have to connect at all. Consider these learning your case studies. Now, you know the reasons for small business failure, and I am sure you will avoid them in order to be successful.
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Takeaway: Reasons for small business failure At a glance
- Not tracking your business
- Lack of a business plan
- Not running on a system
- Lack of management experience
- Not having a predictable schedule
- You’re too cheap
- Unexpected growth
- Lack of vision and prediction
- No use of technology
- Personal use of business funds
- Not having protocols for everything
- No deadlines
- Rarely hitting goals
- Over-investment in fixed assets
- Poor credit arrangements
- Lack of expertise in crucial areas
- Lack of financial analysis and review
- Higher competition, lower sales
- React instead of initiate
- Lack of urgency
- Not knowing what you want
- No desire to learn
- Lack of experience
- Insufficient capital
- Poor location
- Poor inventory management
- Underestimating the need for strategic planning
- No creativity and innovation
- Wrong niche selection
- Poor pricing
- Team breakup, not right people in the right place
- No competitive advantage
- Ethical failure
- Poor leadership
- insufficient commitments
- No market demand