Launching a business can be an exciting experience for aspiring entrepreneurs looking to pursue their dreams. Unfortunately, eight out of ten businesses that are launched today fail for a variety of reasons. Studies have shown that some of the main reasons businesses fail are due to lack of planning, not having enough capital, and hiring the wrong people. This article will outline five common ways that new businesses often get ruined from the start.
- Poor Planning
One of the most important factors when starting a business is the strength of the business plan. You’re unlikely to succeed if you launch a venture without first conducting research. Before committing resources to a business project, entrepreneurs should conduct a thorough SWOT (Strength, Weaknesses, Opportunities, and Threats) analysis to uncover opportunities and dangers in the target marketplace. By identifying opportunities early in the process, entrepreneurs will have a clear path cut out for them to follow.
- Being Cheap
The general maxim that making money requires money is truer today than ever before. Customers want to work with businesses that are the best. Those who skimp on real estate, marketing, products, employees, and other aspects of business will be unlikely to succeed. Investing money in the right equipment will help ensure a business has a better opportunity to win in the marketplace. Evaluate the competition carefully, and then look for a way to offer higher-quality products and services through superior investment.
- Working Alone
Business is a human enterprise, and those who try to launch their ventures alone will struggle to succeed. While giving away equity or paying expensive salaries may be undesirable to the inexperienced, the reality is that success is nearly impossible without others. Entrepreneurs should be constantly searching for opportunities to develop partnerships with a wide variety of individuals. This can broaden the scope of your knowledge set and allow others within the company to offer their expertise for projects.
- Working Minimal Hours
Many people want to launch their own business because they feel it is a good opportunity to avoid the monotonous nine-to-five job. The reality is that entrepreneurs who work 70 hours or more per week often run successful businesses. In fact, some entrepreneurs work over 100 hour weeks when first getting started. Those that lack the motivation or environment to work at this level will be unlikely to beat driven competitors.
- Becoming Complacent
The difference between entrepreneurs and self-employed individuals is entrepreneurs are willing to innovate. While it may feel good to simply sit back and reap the rewards of past success, competition will quickly creep in and overcome complacent companies. Once success has been realized, successful entrepreneurs should aim to further-consolidate their victory, rather than idly enjoying success.
