Starting a business requires more than just the desire to earn and be your own boss. You have to have enough practical experience, a sound entrepreneurial judgment and foresight, not to mention luck. And to be successful in business, you must master the basics of business success. The good thing is, all the basic business skills you need to succeed can be learned and the only limit to what you can achieve is the limit you place on yourself.
Here are the 7 fundamental factors that will determine whether a business will succeed or fail:
Marketing – An entrepreneur’s ability to determine and sell the right product to the right customer at the right time.
Finance – An entrepreneur’s ability to acquire the money you need, and account for the money you receive
Production – An entrepreneur’s ability to produce products and services at a high enough level of quality and consistency over time
Distribution – An entrepreneur’s ability to get your product or service to the market in a timely and economic fashion
Research and development – An entrepreneur’s ability to continually innovate and produce new products, services, processes and responses to your competition
Regulation – An entrepreneur’s ability to deal with the requirements of government legislation at all levels
Labor – An entrepreneur’s ability to find the people you need, deal with unions, establish personnel policies, training and organizational development
Although most businesses fail due to 3 major reasons: lack of knowledge; lack of money; and lack of support. There are however, thousands of companies who failed because of the following 10 reasons:
Lack of direction. When business owners fail to establish clear goals and create plans to achieve those goals, especially before starting out, then they have a 50% chance at failing because they don’t have a complete business plan to guide them through.
Impatience. Business owners should not endeavor to accomplish too much too soon, or expect to get results far faster than is truly possible. In the business, everything costs twice as much and takes three times as long as expected.
Greed. The idea that by charging too much to make a lot of money in a short period of time, is an idea any entrepreneur should not entertain because with this kind of thinking, rest assured failure isn’t far behind.
Hasty decisions. Entrepreneurs should not take any action without thinking it through first in order to avoid costly mistakes that might eventually cause the business to fail.
Poor cost control. An entrepreneur spends too much, especially in the early stages, and spends all their startup capital money before achieving profitability.
Poor product quality. When you are selling products of poor quality you will very likely lose all possible repeat business thus making your remaining products difficult to sell.
Insufficient working capital. As an entrepreneur you should have a contingency fund because you cannot expect a positive cash flow all the time to keep your business running.
Bad or nonexistent budgeting. As an entrepreneur you must develop written budgets for operations that include all possible expenses.
Failure to anticipate market trends. As an entrepreneur you must recognize changes in demand, customer preferences or the economic situation in order to keep up.
Indecisiveness and bad human relations. As an entrepreneur you must be able to make key decisions in the face of difficulties and you must not concern yourself about the opinions or feelings of other people if it is for the good of the business. However, the wellbeing of your staff should also be considered. Personal problems and conflict with staff, suppliers, creditors and customers should also be avoided as it can easily lead to business failure.By Cleo Schulz | March 11, 2016 | Success And Failure Read More