Is your Business Doomed to Fail? Here's How you Find Out

Do you feel as though your business isn’t doing as well as it could be? If so then now is the time to pivot. If you don’t then you may find that things only end up getting worse for you over time and this is the last thing you need.

No Business Plan

Having a business plan is so important. This is especially true for brand-new business owners. What might sound like a good business plan, could well not be in reality. This doesn’t mean that you should ignore your passion but it does mean that you need to do a bit of research so you can make sure that you are hitting all of the right marks. A business plan forces you to define your unique value proposition, which will help you to stand apart from your competition. Some of the things you need to document within your business plan include who your customer base is, where they are going to buy your product and how they are going to find out about your company. You also need to document your cash flow predictions and your start-up capital. Remember to factor in your living expenses and your business expenses too. Most companies are not profitable within their first year, but if you can plan out your expenses now then this will drastically increase your chances of success later down the line.

Failure to Know Your Customer Behavior

We live in a very connected age. The customer is always right, and it’s your job as a business owner to give them the best experience possible. People also demand quality customer service. If you don’t deliver it then you may find that your customers complain on social media and this is the last thing you need. One way for you to work around this would be for you to monitor your feedback and engage with your customers as much as possible. If you don’t know where to start then social media is a great platform. Customers may even prefer to message you on social media when compared to other platforms, so make sure that you consider this. Google reviews are also well worth paying attention to. 6 out of 10 people now look to Google to find out if a company is reputable or not. Lastly, you have Trustpilot. They have over 45,000 new reviewers every day, and their entire community is dedicated to helping people have the best experience when going through a company.

Inventory Management

A business cannot be successful if it has a poorly managed inventory. Studies have shown that poor business management ends up leading to inventory shortages as well as cash flow killers. It’s a rookie mistake that can happen to any new business that does not have a good understanding of its sales patterns. If you are not keeping track of your in-demand items and if you don’t have a solid POS system then this will make you way more prone to shortages. As a merchant, you take on risk whenever you buy large amounts of inventory. If you don’t sell your products as fast as you’d like then they may lose value or in some instances, they might become obsolete. This forces you to then sell them at a discount, or not sell them at all. Instead of thinking of stock items as inventory that lines your shelves, you need to think of them as piles of cash. Each product that is in your warehouse or storage unit is hard cash that you won’t ever see, purely because it is not contributing to your ROI. 

Unsustainable Growth

In the world of business, it’s important to know that slow and steady ultimately wins the race. If you expand too quickly or if you take out credit in the form of small loans then this can leave you in a bad situation if the market was to change. Trying to take on more business than you can handle will also result in you experiencing a quality decline. You may become overwhelmed and as a result of this, your business may suffer. Be smart about which customers you decide to pursue and be mindful of how you are going to pay back your business loan. Saying no is generally part of running a business, so make sure that you are mindful of this and that you take steps to benefit yourself where possible.

Lacking Sales

Nothing will hurt your new company faster than not reaching your sales goals. This can happen when you rely far too much on a single consumer. If your cafe depends on a lot of student traffic during the school year then when the year ends, you have to find other ways to diversify so you can stay afloat. The only way for you to hit your sales targets would be for you to gain insights from existing data, and then use these insights so you can transform your sales strategy. A quality POS system is a great place for you to start.

Trying to do Everything

Small company owners often see themselves as being able to do everything. That being said, they often have a distinct set of strengths and weaknesses. You also have a finite number of hours in the day. One thing to remember here is that delegation is your friend. Whether you hire your first employee or whether you invest in software that cuts down on busy work, your company will only begin to make money when you can offload some of your responsibilities onto other, more qualified shoulders.

Underestimating Paperwork

When you were in the initial stages of planning your company, you might have envisioned happy customers as well as smart marketing. You might have also thought that you’d have plenty of cash. You probably didn’t think that you would be spending most of your days dealing with spreadsheets. The unfortunate reality is that a lot of your time will be consumed by administrative tasks. Whether you are managing your inventory or trying to manage your team with accounting services, it is so important that you give some serious thought to how you are going to handle tasks like this. Be prepared and make the effort to hire accordingly. Having an accountant working with you is always a good idea, as they can make sure that you meet all of your tax obligations while giving you the support you need to keep your business afloat. Sometimes they can even warn you against future trends that could be harmful to your company as well, so make sure that you keep this in mind.

Refusing to Pivot

Old-fashioned stubbornness comes at a cost. It is easy for you to become so obsessed with your business idea, that you don’t end up being successful with it. By the time your company comes to celebrate its second anniversary, you may find that all of the excitement about your new store has worn off and that you just become another statistic. Either way, if you are reluctant to pivot then this will make things even more difficult for you in the future. Make sure that you are always one step ahead of the trends and that you are not compromising your business through simple lack of thought.

Poor Branding

If your branding isn’t good enough then this will make it very difficult for you to succeed. One way for you to navigate this would be for you to invest in a quality branding service. A graphic designer can help you to construct a good logo and having someone who can advise you on what colors to use, or even what font to have will help you a great deal as well. It doesn’t matter whether you hire someone to help with the packaging of nutraceutical products or whether you simply get someone to help plan your site because little things will make a huge difference here. 

Lacking Data

Your small company will be competing with a lot of big behemoths. What makes their operation different to yours? The main thing is that they have way more data. Even though your market is much smaller, you still have to gather as much information as possible. If you don’t then you may find that you are not able to make good decisions. In regards to expense, if you want to buy some new inventory or if you want to make changes to your storefront then this will cost. You also need to know how much money you need to dedicate to employee wages. It can be difficult for you to work out things like this, but if you have a good amount of data at your disposal then this will help you going forward. Take the time to research and study your competition, while also documenting the industry average for expenses. If you can do this then you will soon find that it is easier to get the result you are going for when it comes to starting your business.