Businesses of all types and sizes face risks that may lead to eventual failure. Such risks may involve the business model, product development, finances, customer service or the team itself.
Startup companies and small and medium enterprises are particularly prone to these issues. In fact, research has shown that 75 percent of venture-backed startups fail. Fortunately, there are many ways to reduce the odds of failure in your business.
Consider these 6 tips to improve your chances of success.
Ways To Avoid Business Failures
1. Set Clear and Realistic Objectives
Having an overall grand vision is significant in any kind of endeavour. Your vision sets the direction of your company. However, you also have to break down that grand vision into small, measurable, achievable and realistic goals that are easier to handle. Accumulating small wins can help foster professional self-esteem and propel your business further.
Set realistic goals, and try to consistently attain them by establishing strong habits and systems in your business right from the start.
2. Ask Help from Others
When setting up your business on a tight budget, doing everything by yourself may seem as the only option. However, being in charge of every single aspect of your business from management, marketing, product development, accounting and other back office activities may result to serious problems.
Conduct a core competency check on the skills that you have, and the needs of your business. Doing so can help you stick to your strengths, and efficiently delegate other tasks to others. Build a diverse team of people who possess complementing skill sets that are needed for your business.
3. Learn Your Financial Vocabulary
Although you may outsource accounting services, it is still important to be able to read financial reports such as profit and loss statement, balance sheet, and cash flow statement. Today, you can already learn the basics of your finances from workshops and webinars.
4. Get in Touch With Your Target Market
You cannot control the market, but you can keep yourself updated on the latest trends that can help your business stay afloat. Regularly examine internal and external environments through SWOT analysis. Doing so can help you shore up any potential profit pitfalls.
5. Build Your Niche
Before rushing into developing your product line, identify your target market first. You can do this by writing a profile about your specific target customer. More importantly, talk to the potential customers and gather information firsthand. Learn what they currently want, and focus on giving it to them.
Focus on mastering this specific product, and establish yourself as an expert in it. During the first few years of your startup company, expanding into new product lines and industry sectors can dilute your strengths and lead to failure. When your budget and manpower are still limited, devoting your efforts and money to a specific product and customer base may be a smarter move.
6. Look for a Suitable Address
May it be a physical address or a URL address, make sure that it is appropriate for your type of business. For a brick and mortar business, refrain from sacrificing the location of your office for a cheaper rent. For an online business, try to avoid hyphens and uncommon suffixes that may confuse your customers.Recommend0 recommendationsPublished in