Why so Many Start Up Businesses Fail and What You as an Entrepreneur Need to Do to Enhance Your Chances of Surviving the First Year
Why so many start up businesses fail and what you as an entrepreneur need to do to enhance your chances of surviving the first year
Business failure refers to a company ceasing operations following its inability to make a profit or to bring in enough revenue to cover its expenses. A profitable business can fail if it does not generate adequate cash flow to meet expenses. According to The Dun & Bradstreet and INC. magazine, we can see a result of 33% of all new business fail within first six months. Fifty percent of new business fail within their first two years of operation and 75% fail within the first three years.
Here are the leading reasons of business failures. The first main reason is people open their business without any business plan. These business owners simply open their doors for business and then expect it to be succeeded.. There are many consequences that cause business failure because of poor business plan. For example, under funded. Many business fail within the first few months because the owner runs out of money. Running out of money is a result of poor planning, A business plan will tell you exactly how much you require for start up that avoid cash flow problems. Secondly, location is a very important business decision that can cause a business to be success or fail. Therefore we should have choices of location in our business plan. A good location is one that appeals to large numbers of customers, while at the same time minimising costs. There is one mistake that business owner often made which is only consider about the cost of location but overlook other factors like if the location is not visible to customer or inaccessible to get. Beside that, lack of operating goals and objectives also decrease the probability of business to success. There are some business owners, which create a business, plan to obtain a loan but once they receive their funding, they put their plan on the shelf and do nothing further with it. By setting up
Business failure refers to a company ceasing operations following its inability to make a profit or to bring in enough revenue to cover its expenses. A profitable business can fail if it does not generate adequate cash flow to meet expenses. According to The Dun & Bradstreet and INC. magazine, we can see a result of 33% of all new business fail within first six months. Fifty percent of new business fail within their first two years of operation and 75% fail within the first three years.
Here are the leading reasons of business failures. The first main reason is people open their business without any business plan. These business owners simply open their doors for business and then expect it to be succeeded.. There are many consequences that cause business failure because of poor business plan. For example, under funded. Many business fail within the first few months because the owner runs out of money. Running out of money is a result of poor planning, A business plan will tell you exactly how much you require for start up that avoid cash flow problems. Secondly, location is a very important business decision that can cause a business to be success or fail. Therefore we should have choices of location in our business plan. A good location is one that appeals to large numbers of customers, while at the same time minimising costs. There is one mistake that business owner often made which is only consider about the cost of location but overlook other factors like if the location is not visible to customer or inaccessible to get. Beside that, lack of operating goals and objectives also decrease the probability of business to success. There are some business owners, which create a business, plan to obtain a loan but once they receive their funding, they put their plan on the shelf and do nothing further with it. By setting up