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3 Reasons Why Businesses Fail

“Ideas can start with a sheet of paper to define the concept and then evolve into a short survey or interactive exercise to start collecting evidence”. – Alexander Osterwalder

According to 2016 statistics published by the Small Business Administration (SBA), about 78% of small business startups survive the first year and about half of all employer establishments survive at least five years. Businesses fail for so many reasons but this article will focus on just three.

1.Test location to see if it is the right fit

Every business operates or seeks to operate in a particular location. It is only expedient to look out for the location and see if it is viable for the business that you want to run. Some geographical places are not enabling for a business. In another sense, the people in the location that your business seeks to operate may not need your service or product. Testing the location to see if the business will be profitable over there will save your business from future failure. You also get to survey where your right customers and competitors are when you test the location.

2. Test the product through a pop-up shop or market stall to see if people are really hungry for it

It is not advisable to start a business upfront without doing a pilot. Pop-up shops and market stalls are exemplary of  businesses who understand the concept of starting small. It will be of great disservice to your efforts if you start a business  by launching a huge stock of products on the market. The essence of pop-up shops is to give the users or customers the chance to provide feedback on the product you want to introduce into the market. It also allows you to map out some strengths and weaknesses of the business so as to correct the necessary problems. If you do this, you will be able to serve customers the right product or service that best suits their needs.

3. Take evidence and adapt it to new areas

Plan new areas such as description of the business vision, goals, and keys to success. Know your market analysis, your potential problems and solutions. Work force needs are very essential when taking notes of your business growth. Also is it important to note cash flow analysis, sales and expense forecast, balance sheets, and income statement. Analyse your competition so as to bring out improved products and services to meet the market needs. Check marketing, advertising and promotional activities of your business so as to keep it on track. Managing company growth is a necessary tool when it comes to the success of any business.

I hope the above information helps you to retain the growth and success of your business whether it is a startup or a big corporation. Having your business in mind is the first step to increasing its growth. Also, don’t forget to test new areas to map out best solutions for your business.

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2 comments

  1. Awesome points. Will keep them in mind.

  2. Thanks Kofi

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