Do you feel like you're spinning your wheels and your business still has not reached the place you hoped for? It could be for several reasons. Take a look at 3 main reasons businesses fail.
1. Lack of Planning
It is critical for ALL businesses to have a business plan. A contractor does not build a home without a blueprint. Building a home takes instruction. The blueprint provides the instructions for building a home. In order for that home to remain standing, it has to be built on a solid foundation. The same goes for a business. In order for a business to remain operating, it must be built on a solid foundation. A business plan helps create a solid foundation. Often times, business owners get so excited about launching a business or an idea that they forget to carefully plan it out. If you're planning to start a business, you need to conduct thorough research on the industry you're going into, your customer, location and your competitors. The industry research is most important because you need to know what type of licenses and business registrations you need, how much they will cost and how often they need renewing. The more you research, the more you will know. You will never know everything but researching helps tremendously with planning for success.
2. Insufficient Working Capital
A successful business owner has 3-6 months of working capital in the bank. Businesses fail when they don't have a sufficient amount of capital in the bank to cover business expenses. Before going into business, one should know what they need to start the business and an approximate amount needed monthly. Once you have this figured out, you should work to obtain what you need before your doors open. Sometimes business owners think they can depend on the sales to cover the expenses. This can be done but certainly not when a business first opens. Businesses take time to grow; therefore, you need to have an adequate amount of capital in the bank to stay afloat until the business can pay it's own bills. Business sales are never consistent; always up and down with slow and busy seasons so again, having enough capital is important. Insufficient working capital is fatal to the success of a business.
Ways to obtain capital:
3. No Mentor, Coach or Accountability Partner
Every business owner should have a mentor or coach and an accountability partner. A mentor or coach is someone who has been down the same path you're taking. He or she is experienced, successful and willing to provide advice and guidance — for no real personal gain. Secure a mentor or coach that is an expert in your line of business. These are people you can work with to assist in the success of your business. Great mentors or coaches can have an enormous impact on your company. They can assist in opening doors that may not have been available to you otherwise. They can be found in a variety of places. Don't be afraid to step outside of your comfort zone to get what you need for your business.
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