Top Reasons Small Businesses Fail

Running a small business can be challenging and time-consuming, with many obstacles and potential pitfalls. Unfortunately, many small businesses will fail within their first few years. Starting a small business can be an exciting venture, but successfully operating and maintaining that business will require diligence and a persistent attitude. While many small businesses will not survive, we can look at the common reasons they don't to gain insight and help avoid the disappointment of an unsuccessful company.

• Inadequate Business Plan

  A primary reason new small businesses may fail is an inadequate or underdeveloped business plan. The vision for your business is the foundation of your business plan. It will be hard to create a successful plan if you have an undefined vision. You must first have a clear vision and know your business goals. From here, you can create your business plan.

  Inadequate business plans fail to account for and plan for all of the variables involved in operating a small business. These include upfront capital required, management and employee needs and strategies, risks in the marketplace, etc. On the other hand, successful business plans have put a lot of careful thought and time into creating them. They seek to cover all aspects of successfully operating a business and assessing and developing strategies for potential threats.

• Inefficient Marketing Plan

  An essential component of your business plan is your marketing plan. Identifying your target niche and customers and determining strategies as to how you will reach those customers with messages about your product or service and how to convert those leads are all necessary components of an efficient marketing plan.

• Lack of Adaptability

  Marketplaces and industries are constantly changing and evolving, creating new trends in the business world. Failure to adapt to the evolving markets, demographics, technologies, or business strategies may leave small businesses at a disadvantage and unfavorable position. Therefore, the ability and desire to continually learn and adapt to stay on top of new successful trends is vital in staying relevant and competitive as a small business.

• Unsatisfactory Customer Service

  One of the most vital components of operating any business is having good customer service. Companies with poor customer service are more likely to have a negative reputation and less likely to receive referrals from their customers or have returning business. Therefore, addressing your customer's needs or concerns regarding your product or service is of the utmost importance. Being professional, caring, and attentive towards your customers, especially if they have a complaint, is one of the best ways to build rapport, trust and respect amongst your customer base. Making it a priority to put yourself in your customers' shoes and do the best that you can to ensure they have a positive experience in dealing with your company is one of the best investments you can make in your business.

  Returning phone calls and emails in a time-sensitive manner and delivering your product or service as advertised is respectful of your customers' time and showing your appreciation for their business and support. Good customer service goes a long way and makes a good impression.

• Lack of Commitment

  Consistent action and diligence are two essential components to starting, maintaining, and succeeding in any small business. You will need to put the time and effort in and show dedication over a long period to build a business that becomes successful and maintains its success. However, this persistent effort can pay off in the long run and contribute towards a more self-perpetuating business once you start to gain momentum and take action to maintain your progress.

Key Points to Remember

• Put Time and Effort into Developing your Business Plan

  Think of all the necessary components and variables you will need to address to operate your small business successfully.

• Target your Customers and Niche Effectively

  Invest in developing and implementing effective marketing strategies to reach your intended audience and convert sales.

• Stay Flexible and Adaptable

  Spend time learning about new technologies, business trends, and changes in your market and target audience. Then, don't be afraid to experiment with new technologies and strategies if you see them performing well in the market.

• Provide Good Customer Service

  Maintain a good reputation and good customer relationships by providing good customer service. This can result in repeat customers and referrals.

• Remain Committed

  Continue to show consistency and persistence in pursuit of your business goals.