If you are thinking of starting your own business, I have a little task for you. Take a coin out of your pocket, choose heads or tails, and toss it. There’s a 50-50 chance that you will guess correctly. And those odds are exactly the same when it comes to starting a business.
According to research, 50 percent of all small businesses fail within a five-year period, and when you consider all the work that you need to do in that time, it’s nothing short of a tragedy. There are, however, a few ways of improving those odds. The first step is to understand everything that could go wrong, to ensure that you don’t make the same mistakes.
With this in mind, we’re going to take a look at some of the biggest reasons why half of all small businesses will end up failing. Take a look, address the issues, and you will improve those coin toss odds so they are weighed in your favor.
Lack of sound reasoning
Why are you starting a business? Is it because you hate your job, or do you want to get rich quick? Perhaps you have no other alternatives after being made redundant or getting fired? Maybe you think the life of a small business owner gives you a lot more freedom to do what you want in life? While all these issues could be solved by starting a business, none of them are good enough reasons to start one.
So, when should you start a business? All of the most successful companies in the world start with an idea of solving a problem or creating something that people desire and need. If your business idea does neither of these things, the likelihood is that you will sink without a trace.
Lack of effort
The next reason small businesses fail is self-inflicted. If you aren’t prepared to work hard to make your dreams come true, it’s not going to happen. Sure, there are plenty of freelancers or small business owners who proudly shout they only work four-hour weeks and still rake in a fortune. But that’s now – in the past, they have spent years working super hard to get their business off the ground.
But it’s not only graft – you have to work hard in the right places. You could spend months writing blog posts, for example, to underline your authority in your chosen industry. But building a great online presence isn’t enough. You’ll need to promote yourself and your material on and offline.
Networking and getting out there to meet people is a necessity. You’ll need to make uncomfortable phone calls to cold prospects, and you can expect a lot of rejection. None of these tasks will be easy for everyone, but if you want your small business to succeed, there are no other alternatives.
Lack of presence
Without advertising and marketing, your product or service will go unnoticed forever. If no one knows you exist, how are you going to sell anything and make any kind of living? The vast majority of companies that go out of business do so because they fail to get the word out. The traditional methods of marketing – such as flyers, advertising in local papers, and phone calls – are still relevant, of course. But one of the best ways you can market your business these days is with a website.
As a web development company points out, there is a lot you need your website to do. It needs to look great, of course, but you also need to consider how it is going to make you money. If you have products to sell, you might need an ecommerce site, for example. Are you offering a service? In which case you need your site to focus on turning visitors to your site into leads, and then your leads into customers.
Perhaps you will need a brilliant blog, full of valuable and exciting information that earns the trust of your audience. Investment in SEO is also vital, or you won’t get found when people search for businesses in your industry.
Lack of leadership
As an employee, you can achieve success and generate respect if you are good at your job. But don’t think that those skills will make you a successful business owner – it takes leadership and management, too. If you are hiring employees, every single one of them will be looking at you for inspiration, and a lack of leadership can cause confusion, conflict, and low morale.
Even if you are working alone, leadership is necessary. You’ll need to be able to manage yourself, be strict with deadlines, and ensure you are always motivated – every hour of every day. Which brings us to our next important issue: planning.
Lack of planning