Here’s what CBNC says are the 11 common reasons for business failure.
# 1 – Running out of cash
50% of businesses fail in the US because they run out of cash. The US is second only to countries – Japan, Korea, Greece, Portugal, Ireland and Spain. There are any of number of reasons why you would run out of cash.
It’s a major issue.
# 2 – Over confidence
Thinking your business is it. Market test. Research. You will soon find out if your business is the business.
# 3 – Poor Pricing
Tricky. Price too high, competitors get ahead; price too low and you lose cash. Seriously, it’s complex. Commoditization and digital disruptors have led a more efficient market place. Compete on price or service. If your price is higher than the rest, you better be best.
# 4 – Deuling partners
I’ve seen good businesses come unstuck for this reason alone. Surprising how many businesses do not have any agreed guiding principles on how to settle conflicts or disputes. It’s better investing in a legal agreement at the start rather than paying thousands in court, lawyers and administrators at the end, trust me on that.
# 5 – Burnout
Burnout comes in many forms. The risk here is that you’re not as focused as you were when you first started in business. Get some balance.
#6 – Stale marketing message
Be in touch with the market. Stay fresh.
# 7 – Digital
Simple tools such as having a mobile website are missed by many. Interesting survey in 2013 by the NSBA – whilst 82% of American businesses had a website, 74% don’t sell online. Have you started to hear television commercial advertise – buy in store or on-line?
# 8 – Cybertheft
You need more than insurance. If you are working hard on digital, then you should invest in professional cyber security.
# 9 – Competition
Competition comes in many forms. We are living in the world of disruption.
# 10 – Over reliance on one customer
This is an obvious one. Lose the one customer – you fail.
# 11 – Disgruntled employees
All the elements of a business must align. Employees are key. Simple. That’s not to say anything goes. Leaders set the tone at the top. Culture is important and employees must be part of it.
Have a read.
Image: I have fought a good fight – Cathedral Basilica of St Louis, Missouri