How to Avoid the 6 Causes of Business Failure
In a previous post, we outlined six of the most frequent causes of business start-up failure. Considering around 50% of start-up businesses fail in the first three months, we thought it was important to address this and provide a little advice to ensure our customers’ business ventures are successful.
When you start a new business, you get caught up in a whirlwind of excitement. It’s easy to make huge mistakes in the early stages. Even if you’ve been working in the industry for a significant amount of time, starting your own business is a completely different kettle of fish.
To help you avoid running into business problems, we’ve detailed six common causes of failure and solutions for you to apply.
1. Initial reasoning
If you have been working for a business in the decorating trade for a number of years but are considering going it alone, there are a number of things to consider.
It is tempting to think that think starting a new business will mean more time to spend with the family or bring in more money, however, this is usually a long way from the truth and if this is the only reason you want to embark on starting a new business, then you may want to think again.
Starting a business is a huge commitment, therefore, you need to be starting it for the right reasons, for example:
You love what you do
You have the necessary drive and commitment
You can learn from your mistakes
You’re independent and trust your own decision-making
You’re honest and enjoy interacting with others
If you have considered all of the questions properly, you’ll need to map out a full business plan and strategy for the next 12 months at least.
This includes a full financial analysis which consists of;
The equipment and goods you need to buy
The income you need to support yourself and family
The cost of hiring employees
The cost of hiring an accountant
The cost of travel
The cost of marketing
A rainy day fund
If you have friends or family who have done something similar, reach out and ask for their advice.
Click here to get a better idea of the funding you’ll require.
2. Hiring the right people
Businesses can often underestimate how much money they will need to stay operational and make the investments required, such as hiring new staff and paying them on time.
Making the correct hire can be the difference between success and failure as, unfortunately, there are a lot of time wasters out there. That is why you should take your time before offering somebody a position, even if you are in desperate need of help.
The last thing you want is to hire an individual, only for them to ruin the reputation you have built up over the years with a trusted client.
3. Management and technology
You must take care to regularly update your business practices and maintain a level of continuous improvement.
Techniques in marketing and the decorating industry are constantly changing and if you want to stay ahead of the competition, you need to be aware of new technology and demands of customers.
Just look at what happened to the mobile phone industry when the iPhone was launched, suddenly, every other manufacturer launched brand new buttonless phones as fast as they could to catch up with consumer demand.
We’re not suggesting that you need to go out and invent the iPhone of the decorating world, just that keeping up with the latest tech can make a big difference, no matter how experienced you are.
4. Digital presence
In the digital age, a company with a badly designed website or without one completely risks losing out on a lot of opportunities.
People look online for services, you don’t need to be told that, however, even if you have a steady stream of work, you’ll still be missing out on being able to share photos of your work online and attracting bigger and potentially more lucrative jobs.
The number of internet and mobile users is rising rapidly and has continued to do so over the last decade.
It is extremely likely that if your competitors have an online presence and you do not, any potential customers will choose your competitor. If you want to stay in the competition, you need to get online, have a web presence that reflects your brand, and keep it up to date.
If you don’t know where to begin, there are plenty of services online which will build a website on your behalf. However, if you can’t afford a new website, simply getting your business listed on Google would be a good start.
Click here and follow the simple instructions to do it now.
If a good location can help a business succeed, a bad location can do the exact opposite. Consider the following factors when deciding what area to target:
Where are your customers?
How easy are they to reach?
Where are your competitors?
Are there any incentive programs for new businesses in your area?
Will the area welcome a business like yours?
Success for a business comes from the gathering of a loyal customer base, however expanding before this customer base has been built could be disastrous.
Growth is certainly important for the success of a business but this should happen at a natural rate in accordance with your cash flow and business successes.
With the knowledge of why other businesses have failed in the past, ensure you have enough time and money before deciding to buy that new van or hiring that new decorator. Every gamble needs to be assessed thoroughly before you go ahead with spending a large amount of money.
If you are not sure on any of the above points when it comes to your business then perhaps right now isn’t the right time for your business, seek advice from friends, family and experts.