Why Businesses Fail

2009/03/06 at 4:57 pm (Article)

Most businesses fail, but your’s doesn’t have to. Find out why most businesses don’t make it past the first 6-12 months and what you can do to prevent it.

Your business doesn’t make profits.
There might be a lot going on, but you’re not going to make it if your expenses are higher than your income.

You haven’t saved enough money.
You need to save enough cash to run your business for the first 6 months or so before you start making money. If you don’t, your chances aren’t good.

You haven’t defined your mrket and you don’t understand your customer’s buying habits.
If you don’t know who they are, how to reach them, and how loyal they are, how are you going to make money from them?

You think you can do it all on your own.
Believing you can do everything yourself is the fastest way to burn out.

Your business has grown too fast.
If you don’t have the cash to buy more inventory, pay more workers to meet your demand, or even chase the people who owe you money, you’re taking on more responsibilities than you can handle or afford.

You depend on one customer.
The more customers, the better your chance for survival. If you lose the one key customer you depend on for survival, your business will not survive.

You haven’t priced your product or service properly.
If you sell your product or service below what it costs you to make or provide them, your business will not survive.

You don’t manage cash flow well.
When you’re starting, you have to pay for a lot of things up front. You’ll also be waiting for money to come in.

You don’t react to competition, changes in technology, or changes in the market.
You can’t assume that what you’ve done in the past will work all the time. Change with the times and experiment.

By thebeehive.org

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