With the trending economic situation, many businesses have failed. Regardless, many of the causes of business failure can be prevented. Failure is a topic most of us would rather avoid. But, ignoring these ten common warning signs can put your organization into the business failure statistic
Lack of experience is one of the causes of business failure. If you are inexperienced or your management is made up of novices, then your business is likely to fail. Some people get promoted to management positions because he/she seems like a nice person and not on their skill merits without proper management skills or training.
You need to get shot of the bad apples no matter how much you might like them, if they are not productive then they are not a good fit for you or your business, especially if they happen to be family. Short-sightedness to pick the right players on your management team can prove to be a killer for any business. You can have the best opportunities, finance, strategies and goals for a business and still fail without the right team to implement the strategies for a successful turnaround.
When starting a new business, it is advised you get the services of people experienced in that field.
Some people throw accountability into the dustbin because they own the business, Hence, there is no difference between their personal money and business money. They simply spend. You must be accountable for any kobo your business spend and makes.
You cannot start a business where the service is not needed. Making it classy will not make people patronise you. A good market survey is required before a business location is chosen.
Failure to understand your customers & competitors
It’s important that you understand your market and customers buying habits. Answering questions about who your customers are and how much they are willing to spend.
Whether you are trying to turnaround an under-performing business or a failing business, knowing what your competitors are up to can save your business.
You must understand their products and services, what value added benefits are they providing their customers, are we doing more or are we lagging behind, what is their customer experience like good or are we better than them?. The more you know the greater the chances are you will succeed in turning your business around.
Remember the more you know about them than what they understand about you, then and only then are you ready to compete by taking away customers from your competitors. When I work with under-performing or turnaround businesses I not only want my clients to survive but I will make sure they THRIVE in today’s economy.
Lack of understanding of the competition and your customers is a killer on its own.
One of my key strategies for turning around any business is understanding your customer and what you can do for them and not what you can do to them. You see most businesses want to sell and squeeze every bit out of each customer without any consideration for what the customer wants or needs. If you can focus on what’s in it for your customers I guarantee you will win every time, unlike your competitors who are only interested in short-term profits by squeezing the customer at every opportunity.
Overdependence on a single customer
If your biggest customer walked out the door and never returned, your organisation or business may be done for. Hence, do not rely on a single customer. Try as much as possible to diversify your customer base.
What worked for Mr A may not work for Mr B. Many people have gone into business or made a business choice because they see others doing it and think they can be successful in it if they try. It is good you add your own idea after proper consultation, that will make you different.
Quitting too soon
Giving up too early is the biggest reason why many businesses fail. If you do not persist, research, fail and try and try again, you might not be successful in business.
A business will definitely fail if there is no cash flow. Your business needs a steady cash flow to take it through its day to day running.
|Adeniyi OGUNFOWOKE PR Associate @ Jumia Travel|
|phone: +2348090747241 | skype: Sleeksavvy|