how to fail business

Discussion in 'Growing and Managing a Business' started by jass, Oct 3, 2009.

  1. jass

    jass
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    Unfortunately, many of these businesses could have succeeded if they had only known how to avoid the top six pitfalls that commonly plague struggling companies.

    1. Lack of planning

    Successful small businesses
    don't just happen. They are the result of intentional and well-executed business plans. Many entrepreneurs are so eager to get started that they neglect business planning and jump in headfirst with little more than a dream and an idea. That might cut it in some arenas, but not in small business. If you have already started your business and don't have a business plan, your first priority should be to get one. Fast!

    2. Inadequate funding

    Another common reason for small business failure is a lack of adequate funding, especially during the critical start-up period. Inadequate funding severely limits your capacity and threatens your ability to grow beyond the initial stage of life. If you have done your homework properly, you should know how much money it will take to launch your business. Resist the urge to start until you have obtained all of the funding you know you need to do it right.

    3. Bad marketing

    It's possible to create a business that sells the best product at the best price and still fail because no one knows it exists. Getting the word out about your product is critical if your business is going to have any chance of becoming the thriving venture you think it can be. If you don't know anything about marketing, get help from someone who does. If all else fails, cruise the local bookstore and pick up a few resources that will help you get started.

    4. Unreliable suppliers

    You can't sell what you don't have. Your ability to maintain proper levels of inventory is directly proportional to the quality of your relationships with reliable suppliers. Developing effective supply channels can take a little time, but if you are having problems with your current supplier don't cross fingers and hope things will get better. Take action! Seek out new supplier relationships and make the switch as quickly as possible.

    5. Staffing imbalances

    Labor is the biggest expense for most small businesses. Therefore, it only makes sense that it's worth your time to make sure that your company employs the right amount of people. Too many employees and you'll be forced to carry around dead weight. Too few employees and performance will suffer. Striking the perfect balance isn't easy, but the rewards are well worth the effort.

    6. Ineffective sales performance

    Sales are a key element in the success of any businesses. Poor sales, on the other hand, are an indication that your business might be in jeopardy. Maintain a close eye on sales patterns and trends, and hire the best sales staff you can afford to keep the money rolling in and your company rolling on to the next level.
     
  2. Adam

    Adam
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    In order to succed in business, you have to overcome these obsticles that are bad and move on and procceed to bigger challanges. ;)
     
  3. John1

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    Remember things will always get worse before they get better, so any business you start is always going to have obsticles for you to overcome.
     
  4. Adam

    Adam
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    Thats wise words John and so true.

    If you give up at the first hurdle, then you wont succeed or have a massivley lower chance in doing so.
     
  5. chweet20

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    There are lot of busines failure reasons. He mentioned few here. Few more are Improper Brand positioning, Lack of optimisation, not use of wise management skills, ect.. It goes long.
     
    #5 chweet20, Oct 7, 2009
    Last edited: Oct 7, 2009
  6. merlinsorca

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    I agree with all of these reasons. So many businesses start without enough money, without many supplies or staff...
    It would be very hard to meet all this criteria for businesses, so that's why so many collapse. But as long as they have the money, people, stuff, plan and performance... they will succeed.
     
  7. conquertheself

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    Hi
    That is very informative. I would like to add one more important ingredient and that is vision.
    what is the objective in the long run? what are the values form the basis,what are the norms etc..
    So vision statement has to be made and if the employees and the employer are in sync the vision statement will emerge with inputs fro both .This will help the business when faced with adversity.
     
  8. dipcliper

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    how to fail a business very simple just to do this

    Inability to delegate tasks.
    Failure to Research.
    An inconsistent advertising campaign
    Bad accounting practices.
    Dishonesty.
    Choosing quantity over quality.
    :):):)
     
  9. samklein

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    Product Management

    As a member of a high-tech startup the first thing that stands out to me is the absence of product features and development.

    "Startups fail from lack of customers, not from lack of product features or functionality. Why then is there someone in charge of product development but no one in charge of customer develipment?"

    It's really easy to let the engineers do what they do best and design and enhance a product to death. What's more valuable is to take a step back and assess what you currently have. More important even is to understand your customer. Understand their needs, their wants, the bare minimum they'll accept, and how much they're willing to pay. The digital age has made it easier than ever to get in touch with vast amounts of people, and one of the most important roles that will be emerging in high technology companies is Product Management.
     
  10. Fergal

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    Very true, companies sometimes put huge resources into developing product or service features that are of no interest to their customers. Customer focus is a vital factor in business success.
     
  11. blinkky

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    No discipline can lead you to fail.
     
  12. samklein

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    Fail Fast

    Another thing to keep in mind is that you can't be afraid of failure. In fact a mantra to live by in startups is, "Fail as fast as you can."

    This doesn't mean that you should aim to fail, but rather that you should be able to recognize when your company or product is moving to the deep end and is treading water just to stay alive. Instead of sinking vast amounts of cash into a project that is struggling to stay afloat, it's much more valuable to invest that money into new projects and ideas that have a better chance of success and sustainability. The life of every product is limited, and it's critical to move onto new innovations after your current one has reached its peak.
     
  13. colin1

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    Hello

    # Inability to identify the required management skills necessary for success
    # Lack of skills required to put together a successful management team
    # Ineffective control over product cost and quality
    # Lack of inventory control
    # Ineffective customer service programs
    # Setting a product price which is too low
    # Lack of ability to promote a favorable public image
    # Poor vendor relationships
    # Indecisive management teams causing inaction on key decisions
    # Illness of key business managers and staff
    # Lack of succession planning
    # Failure to seek help from professional assistance resources
    # Failure to utilize tax planning strategies to lower tax debt
    # Underinsured against current risks
    # Loss of sales momentum
    # Lack of trust and cooperation among personnel
    # Turnover of key personnel
    # Lack of training for staff members

    Have a nice day
     
  14. augest

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    Quite true. To success a business we should avoid these!
    Thanks for your summary.
     

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