Posted on: 27 June 2023
Roughly 20% of small businesses don't survive the first year. Significantly fewer make it to the 5-year mark or 10-year mark. Sometimes it takes an outside perspective to get a complete view of your business's prospects and areas for improvement. Business growth coaches can teach you why businesses fail and advise you on how to avoid those same pitfalls to become successful. Here are 4 reasons small businesses fail.
1. Shortage of Funds
Every business has overhead costs that are required to keep the business afloat, such as employee salaries, inventory expenses, rent, and office supplies. When you first start your business, you will need to develop your customer base. During this time, your sales likely won't cover the overhead costs. These expenses come out of your funds. When your funds run dry, you'll need to shut down before you have a chance to get off the ground if you can't manage to pay the bills. 29% of businesses fail because they run out of money.
2. Lack of Market Research
You as a business owner should know every aspect of your industry. You should be up-to-date on the latest trends and news in your industry. You should also know everything about pricing and local competition. This information will allow you to see areas where you can grow in your own business. If you don't offer the latest item, you need to figure out how to get it or your customers will go to the competition. If you don't even know customers want that product, you'll never make the right changes.
3. Flawed Business Plan
Business SOPs are constantly evolving as you and your employees learn about more efficient and cost-effective ways of doing things. For example, you may be able to reduce salary expenses by restructuring the schedule, or you can save money by storing documents digitally instead of printing paper copies of everything. Business growth advisors can look at your current SOPs to point out things you can improve with limited investment. They will also have suggestions for larger improvements that will cost more but may be worth the investment.
4. Poor Marketing
You need to market your company in order for people to know what you do and how you can help them. Old marketing methods are being replaced with modern techniques, such as SEO-friendly content and email marketing. Your marketing techniques should target your ideal customer, and a business coach can help you identify the best marketing methods for your company.
Contact business growth advisors to learn more.Share