You started with an idea, refined it, studied the market, crafted your plan, gathered your resources, and finally you were ready to launch your new business.
You overcame many obstacles and achieved some initial success, and now you’re ready to take things to the next level. The only problem is you’re a little short on capital.
If you are in good standing with your creditors, Personal Lending Group can help you develop and expand with a low fixed rate business loan, or simply help with your cashflow.
But before you take that next big step, know that there are plenty of challenges that lie ahead. About half of all new businesses don’t make it past five years, and two-thirds don’t survive more than 10 years, according to the U.S. Small Business Administration.
Here are five reasons why businesses fail.
- Insufficient cash – More than half of the business closures in the United States are due to a lack of profitability or obtaining finance, according to the Global Entrepreneurship Monitor. But it’s not just startups lacking money to get off the ground. About 37 percent of established businesses lack cashflow to bridge from expenditures to invoiced receivables, according to the Corporation for Enterprise Development.
- Lack of market research – You’ve developed a great widget and think there is ample demand for it. The problem is, three other companies entered the market before you did. If you can manage to steal away their market share, is it worth the cost and effort to do so? It’s better to relieve someone’s pain or meet their demand than try to convince them they have that pain or demand.
- Out of touch – Too many businesses speak to their customers, vendors and partners instead of with Dialogue, don’t monologue. Today’s consumers are more fickle than ever, which is certainly a challenge, but there are also more ways than ever to communicate with them. Implement a customer relationship management system and make it one of the things you focus most of your attention and resources on.
- Bad employee management – In addition to the quality of your products and the affordability of your prices, your customers place a huge priority on whether they like dealing with your employees. Are they polite? Respectful? Professional? Competent? If so, you need to keep them. The better you treat them, the less staff turnover you’ll have, and your customers will be more likely to stay with you if they sense more continuity and stability.
- Poor marketing – You can have a wonderful product, hard-working and competent peronnel and a hungry market, but if your customers don’t know about you, you have nothing. Small start-ups often are afraid to spend on marketing because they are more focused on production, sales and distribution. Yes, word of mouth is important and it’s free. But it only goes so far. You must be advertising in a variety of media and closely tracking your return on investment with each medium.