7 Ways To Prevent Your Business From Going Under

7 Ways To Prevent Your Business From Going UnderOwning a successful business is not easy. You get to be your own boss when your own a business. You also have to make every decision. This includes minor day-to-day items and crucial, business defining ones as well. These additional hours of work directly benefit yourself. Some businesses fail within the first five years. Some close before 10 years. Here are some ways that you can keep your business from going under.

 

Good Location

Location is one of the top three things to consider when it comes to starting a business. You want to make sure that you know the area in which your business is located. If you are located in Idaho Falls, you want to know your demographic area and who your major competitors are if you want your business to have a chance at succeeding. This way you know how to market your product or service for that area in the most effective way to those who are interested in your business.

 

It is important to be able to be seen. Sometimes advertising is not always enough. The consumers are going to need to know where you are in order to purchase your goods. This is not a big issue for service-related businesses. These businesses include financial planning, insurance, etc. It is an issue for goods-based companies which include retail, restaurants, etc. Try to stay on the lookout for better locations. It is easier if you are leasing or renting than it is if you own a building. You should be in a place where people can see your business or on a popular commuter route.

 

Be Knowledgeable About Your Business

One of the biggest reasons businesses fail is because entrepreneurs have a lack experience. Some people can do this and be successful with no relative experience. If you have no experience, you should think about the risks involved and the day-to-day upkeep of operation.

 

Evaluate Competition

Another reason businesses fail is because they face competition that was too powerful. A popular competition can move into town and put a small business under. Take the time to evaluate the competition landscape. This should be done for your industry and surrounding area. If you already have a business and you are losing too many customers to your competition, you need to try to think of ways to make your products and your business stand out. This could be as simple as adding a few extra items or a complete overhaul. In the long run, it will be worth it.

 

Insufficient Funds

When you open your business, try to do everything you can to keep a reserve of liquid, accessible cash. This cash needs to last you for about a year with no income. You can make rent or building payments, pay taxes, make payroll, and continue to market your business for 12 months if you have enough saved up. If you have a struggling business and don’t have funds to fall back on, you should think of ways to cut your overhead and start saving up.

 

Company Accounts

Owners tend to dip into the company account to pay for personal expenses. You should try to keep personal expenses and business expenses completely separate. This will allow you to track your financial success more accurately.

 

Inventory Control

Another reason businesses fail is because of poor inventory control. For instance, you can order 240 bottles of suds to be served at the bar. Once those 240 bottles are gone, you need to check against the register to see how many were actually sold. It is a successful method of inventory control if your employees know that they get one free meal. That free meal would be within the eight hours that they worked.

 

Unexpected Success

Many businesses fail because they are not prepared to manage the growth that follows after having an unexpectedly successful business. The key is planning. You need to set milestones for your business. Actions need to be taken when they are met. Books need to be evaluated as well. When you can afford it, try to expand or grow.

There is no guaranteed measure to keep your business from going under. Operating a business is hard. It is not for everyone. Take the time to consider the common reasons for failure if you are in it for the long hau

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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