5 Reasons Why Small Business Fail

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5 Reasons Why Small Business Fail

There are many times we encounter failure or rejection in our lives and career. The failure of a small scaled business is not an exception to this. When this happens, we would need a guide to help us and get us back on track. This is one of the major reasons why some small business starters need an expert guide or someone who is more capable and have been in such field with years of experience. It is also best to ask these sets of expertise for mentorship on how to grow a small scaled business into a larger one.

There are numerous underlying reasons why small business could fail. However, I would just discuss the five chief reasons that are responsible for the failure of most small scaled business.
1. No proper prior planning
Is it considered safe to just take a flight without knowing how, when and where you would land? That is absolutely wrong. Same thing goes for starting a business. It is not right to start up a business just because most people are into it. You must have a goal, a plan and the right motive towards your business no matter how small it may be.

It is generally known that the ultimate goal for starting a business is to make money but this should not be your ulterior motive for it. You should have a plan that would keep your business running every time.

Ask yourself these questions. What do I intend to achieve with my business in the next five years? How do I intend to do this? How would I build a brand that would meet the requirements of my targets customers? This and other related questions should be in place before any commencement of your business.

1. No area of specialization

Before you start your business, it is best to clearly define what area your business would focus on. This is helpful in determining your target customers. The area of specialization that your business would focus on is a most important part of your business. It is the essence that your brand is known for. For example, if you run a canteen business, your product should be known for something unique regardless of the numerous restaurants that are in your locality.

In essence, whatever your business is known for, that would be the reason you would get more of your target customers to patronize you. Therefore, before you start a business, no matter how popular the business could be, never hesitate to ask yourself how you intend to make your business unique from that of your competitors.  

1. No accountability

There are lots of small businesses that choose to have no records of what goes on with the business. Records such as money in, money out, products purchased, product bought and other things related to the business. If these records are not kept, there is a tendency that you would not be able to know what to improve and how to adjust some important details of your business.

1. No customer-friendly relationship

Another important part of your small scaled business is the fact that you need to establish a solid customer-friendly relationship. How you treat your customers would determine if they would come back to patronize you again. There is a huge need to create the needful friendly attitude towards your customers. If you do not do that, your competitors are likely to hijack your key customers. Without doubt, there is a need to establish a good human relationship with your customers.

Everyone in life deserves respect so you also need to appreciate the fact that they came to patronize you while also recognizing the fact that if there are no prospective customers to patronize you, then your business would not stand.  

1. Too much credit and debts  

This occurs due to too much familiarity with family and friends. It is known that debtors would always exist in any sphere of business. They are unavoidable. So what do you do when they come? The answer is logical. Since you are aware of the dangers they could cause to your business, you should immediately reject the offer because your business is just growing.

On a final note, the most important key to succeed in growing and expanding your small business is the fact that you are able to recognize that humans are the greatest asset that a business owner could have. With this in mind, you should know how to manage the affairs of the people that patronize you as a small business owner. However, on a proper management of humans that relates to your businesses, you are on your way to building a brand that stands out amongst your contemporaries.            

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