small business have often staked their entire capital on a new
venture and they stand to lose a lot more than if a big company
fails in their new venture. Before you start a new business
familiarize yourself with the top 10 reasons why many new
businesses fail.
1. The manager is incompetent
Most small businesses fail because the owner does not have the
knowledge to run a business properly. It is advisable to do a
basic business course before starting a new venture.
2. Finances are not in place
Many people start out in business without any idea of how much
money is really required. If you do not know how to write a
business plan get your accountant to help you. In any new
start-up cashflow is king and without proper funding even the
best idea will fail.
3. The Owner gives up too quickly
Any new business will be lucky to break even in their first
year. Many people new to business often assume that they are
going to make a fortune within 12 months. In reality less than
80% of new start-ups make a profit in their first year.
4. Advertising
There is zero point in doing a single leaflet drop to all your
potential customers. There is no point in doing a single
advertisement in your local newspaper. Advertising is all about
repetition. Many of your potential customers will not buy your
products until they have seen your marketing material at least
half a dozen times.
5. Branding
Every single piece of your company has to scream out your brand
including your brochures, websites, delivery vans and the
uniforms that you and your staff wear.
6. Ability to close the sale
This is really an art form in itself. Some people are naturally
good closers but others have to learn by reading and studying
the art of closing a sell. The more you practice the better you
will become.
7. Location
Location is very important to the chances of your businesses
survival. Often you will have to pay more for a decent location
but it can make the difference between just getting by and
turning a decent profit.
8. Ability to get on with other people
We all know that we have to treat our customers with respect
but what about our suppliers. If you do not pay your suppliers
on time they will start quoting you higher prices. If you are
rude to them they might stop doing business with you altogether.
9. Lady Luck
Some people are really unlucky; there is no getting away from
this. Just hope and pray that Lady Luck smiles at you,
especially in the first year.
10. Demand and USPs
Small businesses often overestimate the demand and usually have
no unique selling proposition built in to their products. If
people only ever need to buy one of your widgets and you make
millions, chances are that you are heading for a point of no
return.
Examine all the points above. If you feel that you have an
answer to most of them then you are ready to take the plunge and
start your own business.
About The Author: Naz Daud - CityLocal Business & Franchise
Opportunities http://www.citylocal.co.uk
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