You don’t start a business expecting that you would fail, but if you actually look into the statistics many do, in fact, go under. The survival rate is even lower for sole proprietors.
Many external reasons cause a business to fail, which includes the market size and customer demand, but other equally important factors can hobble a business in its earliest stages and prove fatal in the long run.
Don’t let your small business join the millions that have gone under. Here are eight reasons why your small business is failing — and how you can rejuvenate it.
- A good user experience:
You need to undertake market research as well as research surveys to find the audience preferences,small business and start-ups work on lot of excitement, thereby missing out on a lot of things which the target audience might be seeking.There is a plethora of service providers online which makes it easier for the customers to switch their preferences.The second part is to ask yourself about your brand; What is your story? Who are your target customers? Why is your product or service different from similar competitors? What problem are you providing a solution for? Figuring out the answers to these questions will allow you to create a coherent brand message. Creating a brand, sticking to certain key areas and leveraging them makes it easier of the customers to recall your services.
- Poor Strategy. You need to foresee a business plan to be able to execute a successful business venture. A business can’t succeed without a business plan. Your business should have a short and long-term strategy keeping in mind the crucial elements of business— finances, marketing and management. Hire experts for Lay down a vision-mission statement, an estimate on the workforce that you would require for running your business. Your budgets and how would you foresee likely problems and how to address them. Getting everything down on paper, among the team members is highly recommended.
- Insufficient funds.A lot of times new enterprises fail to keep enough operating funds to begin the business in the initial days or make it through the crucial first few months. They tend to underestimate the capital required for everything from equipment and inventory to staffing and utilities. Even the marketing plan and the execution of it requires an investment.
- Hiring the wrong people.When you hire the wrong person, you’ll likely find yourself looking for ways to reassign the employee or working tirelessly to fit him or her into the organization in some way. We at DKM Online believe employee engagement and employee management should be the primary agenda for any organisation which is on growth orientation. Rather than simply letting the employee go, you’ll owe it to him or her to spend time and money on training and ongoing performance review. Eventually, he or she may become an adequate employee for your business, but there’s also a chance that he or she won’t work out.
- Bad debts You need to communicate with your customer in a friendly and professional manner. There’s no need to harass them and you may be surprised how accommodating they are. Try and find out the main reason why they haven’t paid & come up with a mutual solution. Keep a record of contact and all communication with your debtor in case you need to take legal action. Try negotiating with your debtor and see if they can make some part payments if they are struggling. Write non-threatening letters of demand, clearly outlining the debt and past communications in a professional manner referencing harsher action.
- Seek external supportIf something is way out of your area of proficiency you should seek external support. You might feel the professional fees for accountants, business consultants or tax advisors, marketing or digital agenciesmaybe high but at that point of time the money they can save your business in the long run should make the initial outlay worthwhile. Every company can benefit from professional assistance with their business accounts, and those that think they’ll save money by doing it themselves may find it costs them dear. We as the outsourcing payroll partners for some of the amazing start-ups know that outsourced services are not an expense but eventually they are the acting growth partners of your business.
- Managing the profitsThey don’t understand how profits work. When working out your business profit margins, it’s important to take into account all the fixed costs as well as variable costs that will affect your pricing. If you’ve only looked at the gross profit margin, you’ll find your business making a lot less than expected. DKM Online offers Consulting services and DKM Lp helps companies with business support services like valuations and analysis.
- Poor AccountingThis one goes well with number six, but it is still a deadly toxin in the infrastructure of your company. If you don’t have experience with accounting, it’s probably a good idea to get someone involved who does — however, that doesn’t mean you shouldn’t know what’s going on. Our Interim Payroll services, compliance services are created with the scope of helping businesses in streamlining their business operations.
Think and move quickly, ‘fail fast’ if you’re going to fail at all, and nail your business model. For HR and Payroll related enquiries you can write to us here or you can speak to our representatives.