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Five reasons why small businesses fail

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Five reasons why small businesses fail

  1. 1. Five Reasons Why Small Businesses FailPosted on December 7, 2011 by Usha PrasadJust wishing to become successful doesn’t show any result. It requires a reasonable amount ofplanning and commitment to succeed in any field.When you plan to set up a business, failure is the last thing on your mind. If you are a start-up ora small business owner, you will never see your business fail if you have laid out a well thought-out business plan and set your goals right. Most small businesses did not succeed because itsowners failed to put in their efforts.Let’s find out what are these reasons that lead to failure of a business.1. Starting a Business Without any Focus: Many small business owners set up a business forwrong reasons without any focus on what they want to do and achieve.Starting a business for the sake of doing something,will lead to a disaster. Always, ask yourselfwhy do you want to start this business? If you answer why you are setting up your business, youhave made a beginning on the right track.2. Lack of Proper Financial Planning: Not having enough financial backing spells a doom forany kind of business. You might have a proper planning, infrastructure and human resources inplace, but if you don’t have the capital money, your business will boomerang as soon as it began.© 2011 Apptivo Inc. All rights reserved.
  2. 2. Strong financial back-up not only enables smooth running of your business, it also helps youweather some tough times.3. Bad Management – Managing a business – big or small – is not all that easy unless you are abetter manager. When you are a small business owner, you should be more focused on properlymanaging your business – administration, human resource and most importantly, finance. As astart-up or a small business, you should be wise and careful in every step you take and everypenny you spend. If you know how to manage people and the finances, your job is easily halfdone. Hard work and best management practices are the stepping stone to any successfulbusiness.4. Expanding too Quickly – Who doesn’t want to grow big and succeed in a business? Well,short cuts to success always land you in trouble. As a small business owner, you should have awell thought-out business plan, and aim at growth and expansion in stages. Trying to race aheadwill only lead you into a financial mess, leading to losses. Plan your finances better so that youinvest wisely in the company’s growth. Do not rush to expand unless you are firmly groundedand have all the bandwidth and resources to expand.5. Poor Marketing Strategies – Marketing is an important element for the success of anybusiness. Most aspects of your business depend on successful marketing. When we saymarketing, it also includes other aspects such as advertisement, promotions, branding and publicrelations. Your business – products or services – gets noticed only when you create a buzz. Focuson best marketing practices and brand building. Hire best marketing talents and seek advice froma branding expert. See the value of going beyond mere slogans.Focus on the above mentioned basic points,put in your best efforts and you will be in the bestposition to succeed.If you are an entrepreneur or a small business owner, feel free to share your experience on howyou avoided failure in your business, and also share your success tips. We look forward to yourvaluable comments and feedback.© 2011 Apptivo Inc. All rights reserved.

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