Business failure is as common as starting a business is. And a look at the real statistics won’t do any good for your confidence, either. With reference to top research, more than half of new businesses will fail during their first full year.
According to the Small Business Association (SBA), though, 30% of new businesses are likely to fail during their first two years. 50% within the first five years followed suit, and 66% during the first 10. And a mere 25% make it to 15 years or more.
So, yeah — the numbers aren’t encouraging. That being said, it’s not like you need to be a statistic. Businesses don’t need to fail, especially not without proper preparation. Planning for funding and improved flexibility can give your business a much better shot at succeeding.
Today, I’ll be going through some of the most common mistakes start-ups tend to make during their early years. With these in mind, you’ll have everything you need to learn how to improve your chances of success.
1. Having a Poor Business Plan
Most startups start without a business plan, or with a business plan that’s just poor. Entrepreneurs have business ideas in their minds, which is important, but very few of them have written documents for implementing strategies.
2. Hiring Unskilled Employees
Most business owners end up hiring unskilled workers at some point in their early years, and the overall company performance usually suffers as a result. Business commitment failure becomes a common problem, and can impact customer trust negatively as well.
3. Consequences of Incorrect Sales Forecasting
One of the biggest hits to businesses in their early stages are the consequences of incorrect sales forecasting. An incorrect sales forecast can result in either hiring more staffers than required for your workforce, or creating an unintended workforce deficit. Both situations are unfair to the business, and both can start your business off down a bad path.
4. Employee Dissatisfaction
This is probably most dangerous issue, because employee dissatisfaction results in unwanted resignations at disastrous times. If employees do not believe in the company’s goals, they will not put their best efforts towards its growth.
5. Poor Financial Planning In Business
A business runs for and with money, and poor financial planning in business can get your business shut down at any time. Most failed businesses only realize this when post failure analysis is done.
Poor financial planning or spending money without planning shrinks your financial backup. In the long run, this almost always leads to financial crises.
6. Giving Up Too Early
Here’s a hard truth: for a new business to succeed, you’ll need months of work just to see a few meters worth of traction. Nothing comes easy, and there’s no training montage like in the movies to make all your hard work seem like it’s flying by. It’s just grinding and grinding is, well, a grind.
Most people quit too early, never realizing they’re within reach of their personal goals. That’s the true tragedy of quitting: you’ll never know what might have been if you’d kept pushing just that little bit longer.
Tough times come for us all. When they do, it can be easy to decide to quit, but the toughest times breed the toughest people. Turn your personal challenges into new opportunities, and remember that most failures choose the easier route at some point.
It’s meant to be hard. That’s the point. So don’t work against yourself. Break out of your comfort zone and enjoy the process.
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