Number 1 reason why new businesses fail

[Deleted member 13140]

You want to start a business, you might want to hit pause on that thought and finish reading this, According to Research 20% of new enterprises fail during the first two years, 45 percent within the first five years, and 65 percent within the first ten years of operation. Only 25% of new firms survive for 15 years or more.

And I think I know why -
Bad Location, Bad Internet Presence, and Marketing
it just comes down to this two, And let me explain
If your business relies on foot traffic, a bad location is self-explanatory. A poor Internet presence, on the other hand, is just as harmful. Your company's online presence and social media presence can be just as important as its physical location in a shopping district these days. People will know that they may give you their business if you have an internet presence, therefore if there is a need, making your business available and visible is the next step.

This is analogous to the concept of marketing. You must not only ensure that your marketing reaches people, but that it reaches the correct ones as well. As a result, be sure the type of marketing you're using is appropriate for the population you're trying to attract. Large billboards may not be the best method to promote an Internet company, just as online advertisements may not be the best way to promote a heavy-construction company. If a need has already been identified, make certain you're contacting the people who require your product or service.

Just know when to use online ads and offline ads, in general have a marketing strategy, choose your location wisely

 

[Deleted member 28127]

The problem isn't the location itself where you go to rent your local because you could rent a place near to touristic places but you have expensive rentals however you could rent at a cheap place but there are few clients potential so there is no big difference between earnings.

 

[Good luck]

When there is lack of fund small business will suffer and may likely fail and have problems to survive and secondly, location is very important for any business to survive.there should be good area that is marketable for any Market to operate to be able to grow and one gets good money from it.

 

[funmi]

I agree with you 100% based on the location factor. If you are in a location where people living in that area did not need the service you are providing or the business you are doing, then it will take the grace of God for that business to survive for 6months.
Another factor I know is consistency, if a business owner is not consistent in his or her work, it may lead to failure of the business before the person know it. More so, every business owner needs patient. If things or business is not working out well now does not mean it can't change later. Quitting too quickly is not good for business.

 

[Mataracy]

You are right. It is very good for any business that want to start up a business to look for avoid location before they start.
If the location is good enough then there us tendency that the business will surely survive quickly
And also if there is a good marketing strategy for the company marketers to capture the mind of the people or customers in order to buy their product then the company will make good profit and the will aksi survive quickly.

 

[sincerem]

You stated something most novice business entrepreneurs should put into consideration before starting up a business. We don't just start up a business without making a proper and suitable plans on how to grow the business as time goes on. Location matters very much to any business that is operating offline, it doesn't matter much to businesses operating online. Because, you can simply stay anywhere and operate the business, while you deliver to any location around your region or simply deliver worldwide base on your business scope or seize, and mode of operation. For those running offline business especially on varieties of products ranging from, clothing, electronic devices, merchandise, food etc, should simply seek online presence in order to attract more of the customers to sell his or her products off quickly and drive much more sales. Bad marketing isn't an option for a starter, because marketing is a good instrument towards making a successful business time. If you have that marketing skills to advertise offline and online you'll definitely attract lots of customers and increase your sales even if your products aren't in same quality with your competitors. It simply needs on packaging and how well you advertised it to audiences around.

 

[PICKFORD]

You are right bro, according to your post most business fail because of the location,also most people get loan to start up a new business, getting this loan,are you prepare for it, starting up a new business isn't that easy, before u'll be able to succeed you need to plan ahead,have everyday target and also work towards your target, don't spend unnecessarily,by so doing i think it will help your business to Stand firm.

 

[btaliat]

Reason for bad business starts from the moment the intending business owner chooses business line that he doesn't know more about. There is need for market research before any business can be started. The results of this market research will determine the location of the business. Not only that, it will also determine the right marketing tools to be used in propagating and marketing the business. The management style also matters. Managers and their style always detemine the success or failure of businesses. A manger should be flexible to know the right option to use while trying to manage his business. Not only this, there is also need for the manager to know the style to adopt while dealing with competitors that will surely ensue in the course of running his business.

 

[Skysaint]

You are right in your observations. There are actually many reasons why a new business could fail and I guess it's about time anticipating business owners get to take notice of these points.
Going into a business you know very little about will most certainly end in failure. Before one ventured into a business, it is advised that they make proper research to know how the business works and also to know if it's actually something they can handle. It's sad that this days people just jump into businesses simply because their colleagues are into such a without knowing that what worked for Mr A might not work for Mr B.
Secondly, a business setup could fail if the business owner fails to put all necessary factors into consideration before setting up their business. Factors like the best and suitable position to run such business, if it's actually a business that needs constant electricity, then you should make sure that the location you choose should have a constant power supply. Imagine someone opening frozen chicken business in a rural area.
Another factor that might lead to the downfall of a business is actually heavy and strong competition. This is not something to take very lightly as many businesses have crumbled because of this sole reason. Before setting up a new business, it is best you ascertain the competitive nature of the environment and also get prepared for future competitors because sometimes it's just inevitable.

 

[Deleted member 28127]

This is just because Mr. A has a competitor company to Mr. B means working alternatively for Mr. A and Mr. B means a contradictory work and if you leave the company of Mr. A and work for Mr. B then Mr. A could raise a complaint against you because he thinks you release secrets of work for Mr. B. This is employers thinking unfortenally.

 

[Sotherefore]

I understand perfectly what you are trying to say , but it is not all business that must be exposed to the internet world , although it may be necessary in the modern society but a business failure because of lack of internet connection should not be a point of consideration because most business are not likely to experience failure just because they have not been exposed into the Online system in terms of advertisement . Advertisement can also be done offline using radio or other broadcasting company such as television..

A situation in which a business owner or a group of business managers decided to neglect the advertising aspect of a business then the business won't be exposed to thousands of people and as a result of this it is likely to experience a failure..

A bad location on the other hand can be the main causes of most business failure since some people who are establishing a business have not done a proper research to understand the type of business that is suitable on the location they are establishing , this sometimes may leads to low patronage, it might even lead to high cost of transportation of products from the production location to a place which day demands will be high

 

[Alexandoy]

This topic reminds me of an interview that I saw on tv. The owner of a popular fast food here said that there are a thousand and one reasons for a business to fail. That may be true because at that moment my mind went back to the time that I had my business. Everything was going great after a year of operation that I hired more sales staff. With 4 people doing the sales my business was really looking good and it can be considered a success. There were plans to buy a car so the sales staff can have their own transport. I was managing the business and I was giving it all my time. So what can make it fail? After 3 years of operation the business was on a downward direction. We were losing the big customers. It was really a surprise that my business partner had created his own version of the business and was pirating our customers. That one was not written in the business books.

 

[eldavis]

There are so many reasons as to why a business might fail, but I think one of the main one is lack of proper planning, all the things you made mention of are part of the business planning, before you startup a business, there should be plans on how you plan on carrying out the equation another issue would be the case of where the business should be located, this should be part of the plans as well, the tools needed for the business and how to go about it, all these are part of the plan. So if you do not plan well, you fail.

 

[TOZZIBLINKZ]

1. Investigating the Market
So you've always wanted to open a real estate agency, and you finally have the means to do so, but your desire to open the agency blinds you to the fact that the economy is in a down housing market and the area where you want to work in is already saturated with agencies, making it very difficult to break in. This is a mistake that will result in failure from the start. You have to find an opening or unmet need within a market and then fill it rather than try and push your product or service in. It's a lot easier to satisfy a need rather than create one and convince people that they should spend money on it.

2. Business Plan Problems
A solid and realistic business plan is the basis of a successful business. In the plan, you will outline achievable goals for your business, how your business can meet those goals, and possible problems and solutions. The plan will figure out if there's a need for the business through research and surveys; it will figure out the costs and inputs needed for the businesses.
3.Location
It also matters when it comes to business as mentioned.

 

[Mellorando]

It is not always a thing of merry or joy when a business fail or crumbles, personally I think this next fail or crumbles due to lack of some certain techniques, methods and procedures that should have been applied earlier. To safeguard a new or established business, it is necessary to understand what can lead to business failure and how each obstacle can be managed or avoided altogether. The most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives.
No doubt there are a lot of reasons why new business fail but below are the three main reasons why most business fail:

1. Lack of research:
One of the most common reasons for start-up businesses to fail is that there is no market need for their product or service. So, one of the most important first steps you need to take when you are setting up a business is to conduct research into everything from the existing market, current and future trends in your industry, to who your competitors are, who your target audience is and what will motivate them to do business with you.

2. Not having the business funding they need:
Running out of cash or not understanding what costs are involved in setting up and keeping a business running are a common trap for many small business owners. And the reality is that not every small business owner has the capital to cover the costs associated with starting a new business. So, understanding the fixed and variable costs associated with starting your business should be taken into account when you write your business plan. Talking to a small business banking expert will help you understand what financial assistance you may need – whether you need to apply for a business loan, equipment finance or find out about government support for small business owners.

3. Failing to adapt:
In small business, as in life, things don’t always go to plan. Whether it’s responding to changing trends within your industry, unexpected events like the COVID-19 pandemic or natural disasters, the impact of broader economic issues such as changes to interest rates, government assistance and support , or even changes to your personal situation due to illness or other challenges , it’s inevitable that your business will face challenges along the way. You may have to pivot away from the wrong product or service, a bad hire or an unfortunate business decision in order to survive. The most important thing in this context is to stay attuned to what is happening inside and outside your business and be ready to respond quickly!