A company’s inability to make a profit or to bring in enough revenue to cover it’s expenses and therefore ceasing operations is referred to Business Failure. A profitable business can fail if it does not generate adequate cash flow to meet expenses, nobody wants to discuss failure but ignoring the warning signs of business trouble is a straight visa to the bad side of business survival statistics.
As the saying goes, failure to plan is planning to fail, if you don’t see your destination, you will never get there. A comprehensive actionable strategy allows you to create engagement, alignment, and ownership. Most times, a well written objective and long term plans need to be very handy to avoid cross roads.
2.Lack Of Focus.
Being busy is not being productive, managers and directors can easily carried away by too many minor tasks everyday that their focus tends to shift and their thinking shrink. Sometimes they get caught up in trivial perfectionism in the task which can and should be done by others. By so doing, DOING rather than BECOMING becomes an obsession causing the business to suffer and fail in the long run.
3. Poor Management.
Managing a business encompasses a number of activities: planning, organising, controlling, directing, and communicating. Top management is the back bone of a strong business as decisions and strategies made by the management can decide the fate of the business well before it gets off the ground. There is no need in having strategies or goals if the management teams are not expecting managing a business. Short sightedness to pick the right players on your management team can prove to be a killer of your business. A common problem faced by successful companies is growing beyond management resources or skills which can render the existence of such an organization null.
4. Cash-flow Management.
One major cause of failure of businesses is not understanding the importance of cash flow. CASH is KING. Business needs cash flow to float them through the sales cycle and the natural ebb and flow of business. Don’t wait for funds, manga your funds on your own, don’t think about the huge return,the small returning should be saved for future investment and other miscellaneous activities, running the bank accounts dry is responsible for a good portion of business failure.
5. Not Obeying Market Trends.
It is important to follow the trend and forthcoming business possibilities of the trend. The most probable reasons for the failure of a business is not obeying the market trends. You need to watch the times and how they are evolving to suit your business, you could notice that everything changes to online business instead of offline business. People are more sick to get things online without leaving their place of work. A lot of changes can occur in a few decades which will be good for business if duly observed and implemented accordingly.
6. Competition .
Failure to anticipate or react to complete technology or marketplace changes can lead a business into a danger zone, staying innovative and aware will make your business competitive. You need to have knowledge about your competitors, understand their product and services, what value added benefits are they providing their customers, what is their customer experience like, if you don’t know what you are up against you will never know how to stick with it and survive.
7. Ideology and psychology.
These terms play a role in business. Your ideology should suit your work and psychological you should be fit for accepting the failures of you strategic ideologies if you are prone to panic over every declining activity your business is passing through, then the health of your might be deteriorating due to your attitude.
8. Not Seeking a Professional Advice.
Before you might have started your business someone else might be involved in it already for a couple of years. Even the best business tycoon choke at some stage. Not all have mastered the art of industry in wisdom and information. You don’t have to be shy about seeking expert advice or seeking out a mentor to help you grow your business. Humility can take you and your little business very far on the scale of success while pride will bury it.
9. Customer Base.
To be a successful business it is required to maintain a customer base service marketing model. To service your customers well, you have to focus on quality, delivery and follow-through. It’s okay to say no to some projects so you can focus on quality not quantity, you must also be aware of how customers influence your business. Are you in touch with them?. Do you know what they like or dislike about you?. Do not over depend on a single customer,to avoid your organisation closing down if that customer doesn’t return. Customer satisfaction is very important and can affect the business landing it in a bad shape.
10. Inappropriate Operational.
The demand for all people is to serve them better. The fast and more effective service bought more clients and these clients will be their long lasting customers. It will help them to command a good and healthy effective relationship management. But, the case is not always so. Some workers do not do their job or well enough yet the company invest blindly keeping perceptions of returns on investment ROI such as paying wages to labour without measuring the efficiency, not having a strategic plan of investment in marketing and branding. Operational management seldom can cause failure and leave a person in loans.
Failure is not an option, but it happens, sometimes you win and other times you learn. Running an organization is no easy task,being aware of common downfalls in business can help you avoid them . It is a constant challenge. As an entrepreneur or a leader, devote yourself to avoiding these crucial mistakes that are the causes of business failure.