The statistics are far from encouraging, they indicate that 8 of every 10 new businesses close or go bankrupt before 3 years.
Let’s look at what are the main reasons why new businesses fail before they past 3 years, and some tips to help us deal with each one of them.
Lack of experience
The main reason for the failure of new businesses is lack of experience, many entrepreneurs rush to start a business without the proper experience or training, whether in the creation and management of general business or type of business they create.
The recommendation is that if we do not have enough experience, this should not be a reason for not starting our business, because we can compensate for this lack of experience with good preparation, or advise or partner with people who have it, and we can help or advice on our business.
Lack of capital
Another reason for the closure of businesses is the lack of money, many entrepreneurs are not well calculated investment and, as a result, there comes a time when more capital is needed, and when that happens, do not have the means to to achieve this.
The recommendation is that before starting a business, although our budgeted cash flow, so that we know well what our investment, not lack capital ends.
Not having a business plan
Many entrepreneurs overlook the stage of developing a business plan , do not give due importance, until they finally realize that the business was not profitable, they need more investment, they do not know how to increase your sales, etc.
Before starting a business, be the size that we must always make a business plan, this will help us predict whether the business will be profitable to have an approximate about our future income and expenses, to have a guide for mounting and grow our business, among many other benefits.
Lack of marketing and advertising
Many business owners think that by the mere fact of opening the doors of business, customers appear as if by magic. Do not have a marketing plan, and this often means that consumers do not know of the existence of the business.
We should always have a marketing plan, which states what the marketing strategies we use, and must always allocate a substantial budget to implement these strategies.
Bad business location
Many businesses end up closing, because initially it did not take one of the most important decisions: the location of the business.
The decision of the local location of a business is a decision that we should always look good, and in which we always take our time.
Too much workload
A common reason for the closure or bankruptcy of a business is the workload that ends the employer.
Many business owners end up being slaves to their business , they end up working all day, every day, and even if they want can not fail to work because the business depends on them to keep going.
What we finally end up exhausting the employer, making bad decisions to take, or decide on their own to close the deal.
The recommendation is to start a business doing a bit of everything, and working all day, but then have the ability to recruit the right staff, and to know how to delegate authority.
Lack of flexibility
Many businesses go bankrupt because their owners do not have enough flexibility to make changes when they are needed.
Many entrepreneurs do not take into account the changes that occur in the market or, in any case, do not accept that your business is on the wrong path and need to change course. And what’s worse, when they are aware of it, do not have the ability to correctly enrumbar company.
We must be able to detect early changes that occur in the market and be able to recognize that sometimes our business is in the wrong way, and then have the flexibility to rethink things and guide our business in the course indicated.