Top 4 Major Reasons: Why Small Business or Startup Business Fails

Top 4 Major Reasons: Why Small Business or Startup Business Fails

Nowadays we live in the 20^th century. Till now So, many changes have occurred in our economy.  The overall economic condition of the counter also has been changed. To run a country or to run an organization your economic conditions should be strong and positive, with respect to that, the structure of the economy and market also has been changed. Similarly the business model also has been changed. Now I think you can easily make out the real reasons for failing small business or startup businesses are also has been changed.

If you analyzed from past years the structure of business model and the market position you will find that, people are seeking business opportunities always like you never imagine such as people may do business in these ways for example earlier the fruits shop vendor was selling the fruit as it is but now they are selling slices of fruits, you get easily available chopped vegetables, small business from home(Homemade breakfast, lunch, dinner, cakes, chocolate, all other food category stuff, reselling of other household things, etc. ), the freelancer work for  developer, designer, photographer, chef, etc. , professional organization, professional people. Now you can again make out if you need any particular service for you and you searched in the market you get lot of same service providers. Then it becomes more difficult to keep trust.

When you do a business or customer interaction the trust factor is the main key to running a business smoothly including the cash flow. So, very first reason is Saturation.  Saturation is the biggest reason which will slow down your business process and if same situation for long then you may find yourself winding up your business. For example You opened an IT Organization providing the services of web development but in the market you will find thousands of companies providing the same services. Also if you think as customer, they may get different quotations for the same requirement. Then customer starts comparing and most recent research found that they will take service from where they think we can easily rely on them. So, the same the trust factor plays very important role.

 

Another reason is the strategy. Most business owners fail to make a proper execution plan or the system they work. If your business is taking required modification as per the market and economic conditions then you don’t have to worry. In reality if you don’t have planes then it’s very difficult to sustain your business and end result will be you have to shut down your business. You can prevent this situation by creating versatile and dynamic strategy for your business as per the current market situation, economic condition of the country and with latest trends.

Another reason is ignoring the behavior of the customers. In almost every business we keep in mind that customer is a ‘God’ or ‘Boss’ and always give them a royal treatment. If you don’t understand their demands then it’s a big problem. For example: if you have an electronics goods shop, one customer came and asked for a mobile phone having latest features. You show them a mobile phone with satisfying his/her requirement including the cost and also giving the option for negotiation for the amount. But simultaneously customer is also searching same mobile on online selling sites. He/she finds some better options online and buys from that particular site. So, the shop does not have sale in this particular case. Here you may have to consider the behavior like age group, gender, working style, etc.

The most important reason is doing business for short term money or taking instant lot of money from customers. As a business person you might be facing lot of financial pressure, pending dues from other suppliers, etc.  In such cases your one side of mind may think that, make a customer fool to get money or to get first order you also agree to give the services which your business is not having that particular service for the purpose of not losing the customer. If you do so, this will not run for a long time. Because customer is not willing to trust you. You may do this several times with new customers or repeated customers but one day customers will know what you are doing then they will not come to take your service. Now a day in this smart revolution customers is also becoming smart.   So, Plan properly the marketing & selling strategy from professional Management Consultant.

If you thinking why need Management Consultant Please read here.     

- By PuiSSance We Team.