JINO INSIGHTS

Do you ever wonder why the phenomenon of business failure is so high? Everyday businesses are being established yet more are collapsing elsewhere.

People have high entrepreneurial spirits but not the skills needed for the sustainability of the ventures they create. Almost everywhere the chances of survival are so minimal. According to the US Bureau of labour statistics, almost 20% of new businesses that open fail in the first 2 years of existence, 45% during the first 5 years, and 65% during the first 10 years of existence.

Those are statistics from a country with highly established economic systems to support Entrepreneurship. If the rate of failure is that high as stated by the Bureau of labour statistics, how about the third world countries that face a multitude of impediments ranging from social, political, to economic factors?

In some instances, its even a miracle for small businesses to celebrate their first birthday.

This article explains 4 top reasons why most aspiring entrepreneurs fail in their entrepreneurial journey. It seeks to point out the mistakes they make and suggest solutions as well to overcome the high rate of failure.

I am so glad you are reading this. It will help you start any venture from an informed background. But that’s not enough to escape failure, unless you take the initiative to implement the insights we are going to talk about.

Failure to carryout research. Many people who start their own businesses seem to under look the need to carryout research about the business, they are about to commit their resources into. They simply start, but before long, things begin failing and they wonder why it happens. Research is an important ingredient for the success of any entrepreneurial activity. It helps business owners understand the dynamics that are necessary for growth and long survival. If founders are to escape the trap of failure then research is one of the most significant elements to consider. Research reveals the feasibility and viability of the business idea, the size of competition in the market, the needs of the customers, the existing gaps that the business can take advantage of, regulatory procedures of the government, the most effective pricing strategies, etc. A deeper understanding of the business climate has the potential to open doors for the success of entrepreneurs. But without research, am afraid you only have failure in store waiting for the right time to manifest.

Existing businesses, and aspiring entrepreneurs need to commit resources for research and development. Products keep evolving in the market. New ones come in, while the old ones leave the market. But with research, a business can keep the product alive for as long as it Continues to carryout an effect research and product development.

Poor business analysis. This is a very common challenge in majority of developing countries. People are not equipped with knowledge and discipline to monitor the performance of their businesses, identify problems, and provide solutions.

A successful business is one that takes keen attention to the analysis of its operations and financial flows. A business could be registering a high sales volume, yet it is indirectly incurring losses arising from high costs of production.

The business continues to operate in such a cycle and at the end, it has to close and again we hear another story of a collapsed business. Are you doing some business, or do you know anyone doing business? If so, you then you have to make business analysis a priority.

Conducting a SWOT analysis is a key element in undertaking business analysis. It involves identifying the strengths of the business, its weaknesses, opportunities that it can capitalize on, and threats from the environment. This should be able to bring out challenges of the business and how to solve them.

Sometimes it can be hard to do such an analysis, but hiring a professional analyst at an affordable cost to do it for you can simplify everything and if you are limited on resources, the internet has a wealth of knowledge on how you can do a business analysis successfully. You only need to take time and learn how to do it.

Failure to carryout effective marketing. Marketing is the most important thing in business. It’s the backbone for any business and the lifeblood for continuity. Unfortunately most business people do not understand how vital it is.

It is very important for any business whether a startup or one that has been in existence for long to develop a marketing plan and come up with sufficient marketing strategies. Marketing can be done through traditional offline marketing activities like advertising, promotion, local area marketing, posters, flyers, public relations, etc. or using digital practices through platforms such as YouTube, Tiktok, Instagram, Facebook, etc.

Effective marketing strategies enable marketers to attract new customers by promising superior value and keep customers by delivering satisfaction, a path towards achieving the goal of marketing which is creating customer value and satisfaction at a profit. Without the right marketing techniques, businesses will continue to fail. Thankfully you won’t be making the same mistakes others are making. It’s my wish that you save others by teaching them what you have just learnt.

Poor location of the business. The location of any business plays an important determining role in its success. Whether you conduct your business offline, or digitally, location matters a lot.

A good location is one that is highly accessible to customers. When it is an ecommerce business then choosing the right platform is paramount. There are a number of platforms out there such as Amazon, Shopify, Ebay, for businesses that donot have independent platforms to carryout their business activities.

They are highly accessible by customers from across the globe. Location impacts the sales volume and profitability of the business.

A good location also plays a significant role in attracting competent employees as well as retaining them. Employees always want to work in a location where they can optimize work-life balance. It therefore has an influence in building a great team that a business needs to achieve its goals and objectives.

Majority of business owners out there do not pay a keen attention to the suitability of the location they choose to operate in which leads to failure of many startups.

In conclusion, all businesses should avoid making the above mistakes and begin to carryout research, frequently make an analysis, practice the best marketing strategies, and choose the right location.