Many people from all over the world are afraid of starting up their business ventures because of the myth that most startups do not last beyond a year. This has sadly made people give up on their dream starting a new business for fear of the unexpected and likely failure.
However, this myth is completely misleading, and the opposite is actually the truth! The majority, almost 80%, of all startups thrive for one year and beyond according to the most recent statistics from the SBA Small Business Administration.
Recent research from the small business advocate office of the SBA proves that over 75% of startups succeed in their first year of operation.
Embedded from Best 4 Businesses.com
Small businesses and startups are the backbones of every country’s economic progress. They are a major source of employment since that often employ locally. This simultaneously helps the people’s living standards while driving up the country’s economy.
During the recession for example, when many big businesses faltered, most small businesses withstood the recession and kept going strong. In the process, they helped their many employees weather the economic storms successfully.
Though not all new businesses survive after the first five years, those that do, stabilize after being in business for a few years. A third of all startups survive beyond 10 years.
It is important to note that majority of those businesses that close their doors do not do so because they failed. Some opt to sell off their businesses while other people choose to retire and pursue other channels. So let’s explore the reasons why new businesses fail so you can prosper instead.
Failure to focus on the expectations
One of the reasons for business failures is due to lack of focus on long-term results. When any company fails to define its expectations, they are bound to fail.
Somewhere along the line, priorities change, which creates confusion and this, can lead to negative consequences.
If you start a business and define what you want to achieve in terms of revenue, cash flow, and customer retention, then there is no reason to fail. Be very clear to everyone in the company what you expect as the result. In this way, everyone will work towards achieving that goal.
Failure to invest time in employees
While most people think that marketing strategies are the ones that bring in the largest returns on investment in most businesses, it is not always the case. The people that you employ in your startup are the most crucial part of your growth. They are the body of your business, and in order to get the results you need, you have to train and treat them well.
Focus on their needs and they will focus on making your business thrive by attending to your customers better and since they will care more about your business and your company.
Sharpen their skills by offering training and reward them with benefits and promotions for work well done. A happy employee is a great investment. A discontented employee may contribute to your business failure.
Failure to listen to feedback
Some employers are so overly confident that they dismiss every information given to them about their businesses by employers, customers, and experts. Failure to listen to what people say about your business is a sure way of failing.
If you are the owner of a business and take it upon yourself to run all the affairs, it will wear you down and leave you frustrated. Eventually, you may think that you are running the business all alone without any input from anyone. The truth, on the other hand, is you do not let anyone in – to your personal and professional detriment.
Occasionally, ask your employees, partners and even clients what they think you should change. They will probably ask you to delegate some duties and work as a team instead of taking everything head on alone. If you listen and follow the feedback, the positive results will surprise you. Appreciating those that you work with and listening to what they have to say will make your business prosper beyond the one-year myth of failure.
Failure to choose the right location
If you want to beat the myth of your business failure beyond the first year, then be very careful about the location you choose. Choose a location that best suits your business or service that you are offering.
If for example, you are running a café, do not choose an area with low traffic. You need a place with heavy traffic where you are sure that you will have people coming in for meals at all times. If you run a courier service, do not choose a place where it is hard for clients to reach you with their deliveries. Choosing the most convenient places will ensure a consistent flow of traffic, and this should keep you in business for longer.
Failure to advertise
While many businesses flourish because of hard work, commitment, experience and sometimes luck, it is also good to give your business a push by advertising and marketing your products. Many startups may lack traffic because not many people know what they are offering. You can change this by advertising widely either online or on social media or by using banners and other means of advertisement. This way you know that you will attract paying customers and sell products that people are willing to pay for. Make your products stand out during your marketing campaigns and show reason why you are better than the next company is.
Failure to learn management skills
Good management is the backbone of success in a business. If you do not have good managerial or entrepreneurial skills, learn in order to save your business.
It is scary to start a new business. However, if you strive to work hard on your investment and ignore the myths, then there is no reason why you should not go beyond one year successfully.
Get rid of any bad habits and follow these failure-proof guidelines. You have to remember that without small businesses, the economy would not be what it is today.
Test the waters first before you jump into opening your business. Carry out enough research and know everything you need to know about the kind of products and services you want to sell.
You alone can prove the myth wrong. Good luck entrepreneurs.
About the Author:
Marsha Kelly sold her first business for more than a million dollars. She has shared hard-won experiences as a successful serial entrepreneur on her Best4Businesses blog, where she also regularly posts business tips, ideas, and suggestions as well as product reviews for business readers. As a serial entrepreneur who has done “time” in corporate America, Marsha has learned what products and services really work well in business today. You can learn from her experiences to build your business.