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Get Started in Business. Five reasons why start-ups fail
According to statistics, 9 out of 10 businesses fail in their first year. In the PAnDiKubiz consulting company blog, we will look at the five most common reasons why entrepreneurs fail at the beginning of their business journey.
Reason #1 - "All alone".
Businesses are usually started by experts. Good chefs open a cafe or restaurant, marketers open their own agency, tattoo masters open their own parlour. But business is fundamentally different from wage labour. Being good at providing a service or producing a product is important, but not enough. When you start working for yourself, your responsibilities increase significantly. You will need to attract customers, oversee finances and put out fires at all stages of your business. Many people can't cope with this kind of workload. If you're not ready or don't have the time to understand marketing, sales, finance, etc., bring in experts in these areas. Delegate responsibility, don't do everything yourself or you'll simply run out of energy.
Reason #1 - "All alone".
Businesses are usually started by experts. Good chefs open a cafe or restaurant, marketers open their own agency, tattoo masters open their own parlour. But business is fundamentally different from wage labour. Being good at providing a service or producing a product is important, but not enough. When you start working for yourself, your responsibilities increase significantly. You will need to attract customers, oversee finances and put out fires at all stages of your business. Many people can't cope with this kind of workload. If you're not ready or don't have the time to understand marketing, sales, finance, etc., bring in experts in these areas. Delegate responsibility, don't do everything yourself or you'll simply run out of energy.
Reason #2 - "The idea is there, but there is no demand".
You are burning with the desire to make your idea a reality. Your parents, your wife, your grandmother are all excited about it. But very often it is not enough. The idea is not always embodied in the business, and the opinion of family and friends is almost always far from objective.
Before renting an office and taking out a business development loan, it is important to understand how much your product is actually needed by people. You can be as convincing as you like, but if no one needs your product or service, there is no point in opening a factory, shop, etc. Find out if there is a need. The best way to find out is to analyse the market. Send offers to potential customers, advertise what you want to sell or produce and get feedback. If customers are willing to pay, there will be a demand for the product. Don't be afraid of negative feedback. They may contain valuable information to help you improve your product or service. See if you have competitors, analyse search engine queries. If you do, go ahead. If not, consider whether anyone needs your idea.
You are burning with the desire to make your idea a reality. Your parents, your wife, your grandmother are all excited about it. But very often it is not enough. The idea is not always embodied in the business, and the opinion of family and friends is almost always far from objective.
Before renting an office and taking out a business development loan, it is important to understand how much your product is actually needed by people. You can be as convincing as you like, but if no one needs your product or service, there is no point in opening a factory, shop, etc. Find out if there is a need. The best way to find out is to analyse the market. Send offers to potential customers, advertise what you want to sell or produce and get feedback. If customers are willing to pay, there will be a demand for the product. Don't be afraid of negative feedback. They may contain valuable information to help you improve your product or service. See if you have competitors, analyse search engine queries. If you do, go ahead. If not, consider whether anyone needs your idea.
Reason #3 - "Acting without a plan".
A business plan is not a formality, it is your roadmap to success. Planning is a basic tool that is essential for an entrepreneur. Acting without a plan is like building a house without defining the layout. You will build the house, but whether you can live in it is a big question.
Planning helps you to divide one big task into several smaller ones. For example, you want to make a million dollars a month. Let's say you need to do 1,000 deals worth $1,000 each. What is this $1,000 product? How do you make 1,000 deals? How much money do you need for advertising? The answers to these and other questions will be your business plan. Planning will keep you away from unnecessary costs, unnecessary people and unnecessary processes.
Reason #4 - "Saving on advertising
Most entrepreneurs close their business due to lack of customer flow. Unless you have calls and orders, all your efforts will be in vain. Ask yourself the right questions: "Where do I get customers?", "How do I make them loyal?", "How do I get customers to recommend your business to others? If you don't tell people about your product, they'll never know about it. There are many ways to attract customers. Be prepared to pay for them.
Reason #5 - "Taking money wrongly".
Budding entrepreneurs commit the sin of taking money out of their business project little by little for various needs or wants. The money that comes into your bank account is not your personal money. From the amount you receive, deduct taxes, contractor costs, variable costs, depreciation, business development funds, etc. Only after all these deductions are you left with the amount you have earned. Count the money. If you don't, or don't do it right, your business will fail.
This is just a small part of what you need to consider when building your business. If you need advice, contact PAnDiKubiz Cyprus. Our experts will advise you on the best way to develop your business.
A business plan is not a formality, it is your roadmap to success. Planning is a basic tool that is essential for an entrepreneur. Acting without a plan is like building a house without defining the layout. You will build the house, but whether you can live in it is a big question.
Planning helps you to divide one big task into several smaller ones. For example, you want to make a million dollars a month. Let's say you need to do 1,000 deals worth $1,000 each. What is this $1,000 product? How do you make 1,000 deals? How much money do you need for advertising? The answers to these and other questions will be your business plan. Planning will keep you away from unnecessary costs, unnecessary people and unnecessary processes.
Reason #4 - "Saving on advertising
Most entrepreneurs close their business due to lack of customer flow. Unless you have calls and orders, all your efforts will be in vain. Ask yourself the right questions: "Where do I get customers?", "How do I make them loyal?", "How do I get customers to recommend your business to others? If you don't tell people about your product, they'll never know about it. There are many ways to attract customers. Be prepared to pay for them.
Reason #5 - "Taking money wrongly".
Budding entrepreneurs commit the sin of taking money out of their business project little by little for various needs or wants. The money that comes into your bank account is not your personal money. From the amount you receive, deduct taxes, contractor costs, variable costs, depreciation, business development funds, etc. Only after all these deductions are you left with the amount you have earned. Count the money. If you don't, or don't do it right, your business will fail.
This is just a small part of what you need to consider when building your business. If you need advice, contact PAnDiKubiz Cyprus. Our experts will advise you on the best way to develop your business.
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