Studies show that the vast majority of new small businesses fail. It is possible to get a successful business enterprise the first time around but the chances are against it. Understanding why entrepreneurship efforts fall short could keep you from experiencing the same fate. Here is the list from my experience:
Contesting against the big players
Most business owners begin with wanting to be the most successful in the entire industry. The mistake made is competing with large businesses within the same niche. Large businesses possess a large resource pool and a solid customer base permitting them to easily get rid of competition by providing lower prices, using superior advertising techniques etc. A brand new business with fewer resources should find creative methods to succeed in a market. In other words, stop being a hero and go smaller. The smaller your niche, the more qualified your customers are. There is a saying that says “if everybody is your consumer, than no one is your consumer.”
Trying to do almost everything
An entrepreneur that attempts to handle many facets of an industry will end up being ineffective and therefore lead to failure. This over generalization prevents you from concentrating the accessible resources on providing superior services to clients. The inferior services provided push away clients. An entrepreneur should concentrate on providing the best service on a specific niche, and should go for a niche that has the potential to cultivate and is currently underserviced. A little research brings out several untapped opportunities. Even most significant, delegate whenever feasible.
Not having sufficient capital
This leads to a lot of failures. Undervaluing just how much capital you will need to operate this company until it becomes profitable will most certainly spell doom for your company. This is because expenses previously overlooked appear at the most unanticipated times. This will drain your business fund creating a failure. An excellent idea won’t turn into huge profits without sufficient funding.
Having an incompetent team
The folks an entrepreneur goes into business with will determine whether or not the venture will succeed. Most business people develop an incompetent team or go into business with people for the wrong reasons. Running a company is very challenging and having a team that cracks under pressure will result in failure. You need to select your team very carefully, not just off their LinkedIn account or resume. Everyone has to have a common vision and push to succeed.
A business owner is supposed to simultaneously handle many parts of the company. This makes you lose sight of business goals. To avoid this, you need to develop the skill of delegating duties to your staff. Micromanaging a company additionally creates animosity within the team because they believe their skills and input isn’t appreciated enough. Micromanagement has spelt doom for many businesses. Enable the employees and provide them opportunities to create inside their positions. This confidence in your people will build a infectious and optimistic culture in the company.
Tanner Mangum is a traveler, drum player, and marketer of the creators of the iphone 4 wallet case.