Based on the research, a new business is prone to fail in particular on early years. In fact the research have got that 30 % new businesses get failed at the second year, 50% is failed on the fifth year and only 25 % new businesses success to keep standing over 15 years.
However, a new business didn’t suppose failed. With a good planning, funding and proper flexibility, all business has the same chance to reach succeed and growing bigger. Let’s check these out why occasionally new business gets failed soon. By recognizing these mistakes, it is expected that if you plan to build your own business, you will not get the same.
Not do any Market research
When you want to build a certain business, you have to take a look first the market and research what market requiring. People often ignore this. They often do this mistake by just establishing such a business as they want without paying attention the market condition.
Keep in mind that you have to build a business in what market need rather than push what you want to sell whereas market don’t require it at all.
Less mature business plan
Solid and realistic business plan is absolutely needed. Decide the realistic target, how to reach the target and predict the problem will threaten and how to fix it. To make this plan, you need to research and survey.
You also have to attach the cost required, the strategy and operational schedule as well.
Keep in mind to stay in the planning you have made previously while running the business except for unexpected matter for instance there is big problem which could damage your business.
No access for additional capital
When business gets problem on the middle, it is not good condition for getting additional loan for the capital. Therefore, it is required to keep the cash flow with the available capital to reach the target decided. Don’t think to get any loan more.
Bad location, less internet utilization and promotion efforts
Right location choice is a must. Besides, it must be completed with the full efforts of promotion using all kind of channels such as internet in which it is the most effective way to reach a huge number of consumers without limit nowadays.
Lulled by success reached
After get success, don’t be so fast to enjoy and satisfied with it. Keep watching the market situation and find out whether you have to change your business plan or not.
Too fast to expand
If your business started is run well toward to good direction, it could be your best time to expand the business. But the way to expand must be the same with what you have done to the beginning. Don’t be too fast to decide expanding the business.