Setting up a business is fraught with risk and much like a tiny seedling, a new enterprise needs tender loving care if it is to make it to adulthood. If you look at the statistics, almost half of new businesses don’t make it past their first birthday and there are many reasons why a small business might fold, which we will outline in this article.
Many start-up entrepreneurs fail to realise that they cannot do everything at the same time. In other words, they need to prioritize business functions and delegate accordingly. One such area where most start-ups experience problems is in the area of legal issues. They miss compliances, are unable to update the paperwork, and face fines and penalties from the authorities. Working with a top-notch business law firm like James Berry & Associates can help them address such tensions and worries regarding the legal aspect of their business.
Lack of funds –
Number one on the list, it only takes a few unexpected costs to emerge to put you in the red. Of course, you could apply for a credit card from Thailand’s leading finance company and use the card to cover extra bills. Some entrepreneurs take out a business start-up loan, which can be found at the online loan provider.
Consider Reading: Grant vs Loan
Poor marketing –
It’s tough out there and without a dynamic digital marketing plan in place, your chances of survival are reduced. You can be sure that your rivals are investing in SEO; talk to a leading SEO agency and see what they can do for you.
Marketing is not all about pushing products and services with an aim to boost sales. It is about creating the best, most perfect, and favourable conditions for a business to thrive. This is why in recent years marketing has extended to taking help from online reputation management services to create positive stories around the brand on online platforms. Building a brand requires addressing negative comments and criticisms that have been made against the business.
Consider Reading: Things to know abour Digital PR
Bad management –
If you are not a people person and have poor communication skills, things can quickly turn bad; even those who are good communicators can often have a lack of organizational skills. A business should run like a well-oiled machine, with each person having clear roles, while working together towards a common goal.
Prior to the launch, talk to a business coach and ask for their professional opinion of your business plan, which might reveal a weakness. Business coaching is popular because the skills you learn are with you for the rest of your life and there are online solutions using Zoom. Not having business insurance is also risky, as this article confirms.
Market forces –
This is one aspect that is completely out of your control; it might be an economic crash, or rising inflation and unemployment; there are many factors that can cause a slump in demand, especially with luxury goods. The only thing you can do is be aware at an early stage and make some amendments; the pandemic is a classic example of improvising, many service businesses moved online and the retail sector took a heavy hit.
Poor service –
Nothing will shut down a business quicker than bad service and this is one area where it is almost impossible to recover, should a certain point be reached. The only way is a complete rebranding, ‘under new management, which should give you another bite at the cherry. Service employees with an attitude can really damage your reputation, so staff needs to be evaluated on a regular basis and motivated by their manager.
Supply shortage –
Imagine spending tens of thousands of dollars on a marketing campaign and not being able to fulfill the orders! This can and does happen, which means wholesalers need to have several avenues to acquire prime stock, and should a shortage arrive, you need to adapt.
If you are looking to set up a business, there is much to consider and it is your job to minimize all risk to the business, giving it every chance to grow.