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7 Reasons Why Your Business May Fail Early
Based on surveys it is predicted that 90% of new start up businesses will die within the first two years of start up. Will your own business fall casualty and die within the early years also? The longevity of a business is determined by certain foundational factors. Hereunder are the 7 top reasons:why your business may fail early:
1) Purpose
The purpose of a business is the reason for it's existence-the very essence of the business. History shows that most of the businesses that crossed the 100 years mark were all born out of a heart felt burden to bring about a specific positive change to the society or the world at large. The ultimate goal for them was to make a difference not making dollar. That empowered them to push through thick and thin to a sustainabile success without losing motivaion. When money becomes your only motivation for being in business you are likely to quit early in the journey because you simply dont have any more reason not to when the tides are high and rough. Also when business falls out of purpose the chances of extinction increases even more.
2) Cost.
Every business idea has a cost implication.Without money many things especially operations become impossible.. If your business doesn't have the financial muscles to take care of the attendant operational cost or take dvantage of new opportunities or fund highly potent ideas it is sure to go under in a short while. Moreso, poor management of business costing processes adds to the over all chances of outright and quick business collapse.
3) Timing
Every business is time sensitive. There is a specific window of opportunity for a business to debut and make the biggest impact and acceptibility in the marketplace. If it arrives earlier or later than that period of time,the likelihood of failure will be quite high. Businesses that missed this window of opportunity are often a case of dead on arrival. Business that do not place value on timing will likely operate outside of relevance and out of tune with trends. An irrelevant business will die early in the race. If your business is irrelevant, behind trend or made obsolete by change then it won't survive for long.
4) Communication:
A Vision must be clearly communicated for effective execution. Do you have effective information flow? Do your team even understand what your business stand for ? Are people free to make honest and candid observation or opinions about the business? Are your employees clear about the objectives, their task and expectations? Strong communication not only bring clarity of direction, it helps to keep the business system clean of emotional toxicity. Without communication individual differences erupt into a full blown chaos leading to a total business collapse.earlier in the game.
5) People
Every business objective needs people to accomplished. A business is as good as her people. Successful organizations insist on getting and keeping the right people. Wrong people sabotage the efforts of the right people. When you recruite without a clear recruitment strategy and processes that makes sure only the right people get hired into the business, you may end up with a system filled with the wrong people. Wrong people breed mediocrity that ultimately sink the business. If your business is packed full of wrong people it is not likely to survive for too long.
6) Plan
A business should be organized into a strategy. A strategy is simply a clear cut plan on how to compete and achieve your set objectives. Its about creating and maximizing your competitive advantage to win. What is the competition doing that you are not doing? What separates you from others that you hope to leverage on? Why would a customer ignore others to buy from you? These are some of the questions that should form part of your business strategy. If your plan do not effectively capture the fundamentals of business success, customers money will be redirected away from you to the competition. If it persists your business will be short lived.
7) Behavior
Every business requires certain set of values and behavior to succeed. When behaviour and vision don't align the business loses the harmony needed to power growth. It gets stagnated and ultimately becomes endangered. A business with the right attitude retains more customers than those with bad culture. At the long run, it is attitude or behavior and not exactly capital that determines how long a business lasts. The conduct of your employees play a major role in determining the longevity of the business. Negative culture breeds systemic inefficiencies that cripple business. Entrepreneurs should be aware that they choose success or failure by the way they behave. If you have negative behavior,your business will certainly crash quite early.
In conclusion, if you ignore the above mentioned factors or observe them in the breach,your business will most certainly crash within the first two years at most.
