This is one question that has puzzled a lot of people for years. Countless people have come up with different reasons. As to why such things happen to small businesses over the years. Let’s discuss it further in this post today.
Are you thinking of starting a small business? Are you still indecisive and unsure about the steps to take to ensure your business becomes successful?
Then today’s guide was tailor-made specifically for you. We’ll be teaching you the pitfalls to avoid when it comes to running a small-scale business.
According to Small Business Administration (SBA).The 20% of small businesses fail in less than a year. 50% make it as far as five years. Only about 33% of small businesses make it as far as ten years or more.
Hence, to make sure your small business becomes successful and lasts the test of time. You should prioritize learning from other small businesses mistakes and why you should start using accounting-related software to manage your business like Sage Intacct.
Luckily for you, I have invested the time and effort in identifying the most common reasons why small businesses fail. If you want your business to thrive, continue reading to uncover these secrets.
There are several reasons why small businesses fail but in this blog post. We’ll be discussing the three most important reasons.
The top three reasons why small businesses fail are poor management, financial problems, and their overall marketing strategy.
Most small businesses fail because of poor management and the reason for this isn’t farfetched. Starting a business and managing a business are two different things. Most of the time, the business owner is the only senior person. Although the owner may have the skills required to run the business, he/she may fall short of the attributes required of a strong manager. They may sometimes not have the time to oversee the activities of the employees. The steps to employ in solving this problem are creating management teams to handle the role of managing your finance, hiring, and marketing.
Another one of the major reasons why most small businesses don’t make it past the first year is simply because they lack funding.
As you should already know, money is required to run most businesses and most entrepreneurs rush into starting a business without proper funding which results in the business failing as quickly as it started.
Don’t get the wrong idea, some businesses have thrived with little capital, but such situations are rare. Rather than taking the risk and starting with little to no capital, it’s best to be well prepared and have good sources of funding to avoid financial problems during the growth journey.
Most young business owners fail to understand the importance of having a good marketing strategy. Your marketing strategy is what determines whether your business will grow or fail.
A good way to promote your business is by utilizing online advertising because using this strategy will enable you to reach millions of potential customers.
There are several ways to go about it, but that’s a whole other topic for another day.
Long story short, focus on advertising platforms that allow videos such as Facebook video ads and use story telling marketing techniques to stand out among competitors. Other means of marketing include social media, developing affiliate programs, and the use of Google AdWords.
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Small businesses tend to fail due to a lot of different reasons and in today’s article I have been able to outline three of the most common reasons. So make sure you have good funding, don’t try to do everything all on your own, and make sure to have a good marketing strategy