You’ve been thinking about it for years, and now you’re ready to do it… You’re going to be your own boss! You’ve put in hours of working for others and developing your skills. Now, it’s time to work for yourself. It’s exciting and you can’t wait, but after one or two short years, the dream comes crashing down. Why? What could’ve gone wrong?
Over 50 percent of new businesses don’t survive, and the reasons tend to be as wide and as varied as ever, so if you fancy yourself a business owner, here are a few things to remember before jumping head-first into the world of entrepreneurship.
- Lack of Capital
Most businesses fail when money runs out, and many new companies can’t garner the capital or funds necessary to keep their operations running. Maybe there are problems with advertising; maybe the audience isn’t big enough for the products or services they’re offering, or maybe funds were mismanaged and disappeared far too early. Either way, lack of funding and disinterested investors are two big contributors to the untimely deaths of many new businesses.
- Poor Management
Having the selling power is only half the battle. The other half is dealing with people, and you’d be surprised how many business owners have trouble handling their teams. When conditions are too strict or too lenient, work environments suffer, so if managers don’t have strong holds on their employees, nothing gets done. Running a business is a group effort, and if your team isn’t happy or striving for the best, your business can’t perform well.
- Lack of Focus
A business requires your all, so if you’re easily distracted or have too many things going on at once, things can get out of control. Some people have difficulty shifting their focus to one thing, and if this describes you, your company may fall short of becoming great. Think of your business as though it was your child; it needs constant, 24-hour attention. If you can’t give it the focus it deserves, maybe it’s time to hold off and pass along the reins.
- Weak Marketing
A great invention doesn’t matter if no one’s around to see it, so marketing and exposure are two very important factors when building your business. This usually requires creating social media pages, making the right contacts, and networking wherever you go. No more posting an ad in the yellow pages and watching what happens – if you want your business or services to do well, you must be willing to put yourself out there. Ever wonder why so many films never make it to the big screen? There are thousands of independent movies made each year that never get seen because their budgets don’t allow enough room for advertising, so get out there as fast as you can and sell yourself. It’s the only way to guarantee a successful future.
- Goals Aren’t Set
As a business owner, you’re practically required to set goals. Without goals, you have nothing to reach for, and this is going to stop your business dead in its tracks. Businesses survive by adapting to please their customers, and change occurs by creating long-term plans and working hard to ensure profit. By giving your business something to accomplish, it can stay fresh and consistently move forward.
Keeping in mind these 5 reasons that many businesses fail is important so that you can make sure not to make the same mistakes in your business.
If you have a new business or are thinking about starting one, it is important to make sure that you have the proper insurance coverage to protect not only your business, but yourself and the employees as well. If you have any questions regarding business insurance contact us today. We want to discuss your business insurance options to ensure the future safety of your company.