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Reasons Why Businesses Fail

10 factors you need to consider to avoid the common reasons for businesses failure

  1. No business plan – makes perfect sense If you are heading on a journey and you have no idea where you are heading it makes it incredibly difficult to navigate
  2. Lack of operating goals and objectives – So you have your end destination in mind but haven’t set any criteria for how quickly you want to get there, the methods you will use
  3. Under funded – You have aspirations but insufficient cash. This lack of cash will significantly inhibit the activities and frequency and type of activities you can perform
  4. Failure to measure goals and objectives – If you don’t carry out business measurement’s how can you have any idea as to whether you are achieving your effectively
  5. Failure to pay attention to cash flow – Without cash a business cannot perform. Its all very well having a great product or future orders in the pipeline but if you cant afford to fund the business activities through lack of cash then you will go out of business. Lack of attention to incomings and stock are key cash flow elements
  6. Underestimating competition – Most companies have competitors. These competitors may be direct, indirect or future forms of competition. Competitive forces don’t stand still they adapt and change
  7. Poor people management skills – The adage that a companies  employers are its most important asset is often mentioned. What if the directors / managers don’t have the requisite skills to guide and manage these people accordingly
  8. Not cost competitive – Unfortunately for most businesses they will face competition. Many will choose to compete on price without being the most cost competitive (There is nearly always someone who can build it / deliver it  / fulfill the order at a lower price). Therefore companies need to identify where / how they can compete on issues other than price.
  9. Failure to understand the industry and the target customer
  10. Poor or no marketing – With no means of differentiation and no focus on customers or products the ultimate destination is failure

Reasons Why Businesses Fail

If any of the above factors relate to your business then it could be worthwhile changing and developing or asking for help. Don’t be a dinosaur contact Andrew Goode on 01733 361729 click here and find out how some of our business development solutions can help you avoid business failure. To keep in touch with marketing and business developments click here

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