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In fact, it should be your main concern as the chances of failure are much higher than success.
Although the failure rate decreases slightly, 70% of small businesses still fail within 10 years.
These failure stats are slightly higher thanoverall business failure statsmainly because small businesses usually have inadequate capital.
Despite these statistics, dont be discouraged to pursue your entrepreneurial dreams.
Instead, be prepared and approach your venture with diligence.
Nearly42% of businesses faildue to no market demand.
Although there are many ways to do market research, below I am listing the most reliable methods.
Search online using keywords related to your product/service to see what people are talking about.
Reddit and X (Twitter) are great places to get started.
Knowing how your competitors are doing is a good way to guess how customers will react to your offering.
Research what your competitors are offering and what is the feedback of their customers (online reviews).
This will also help you find potential gaps and opportunities in the industry.
Check out this guide on competitor analysis for all the methods.
If possible, give the products for free in exchange for honest feedback.
Government databases like theUS Census Bureauor private databases likeMarketResearch.comcan also help gain insight into customer behavior.
For private databases, you usually have to pay a subscription to get the information.
Cash Flow Issues
Business survival heavily depends on positive inward cash.
In fact,82% of the failed businessesreport cash flow issues being the reason for closure.
This is where business software plays a crucial role.
Usually, digitizing your business operations solves many cash flow-related issues as processes are streamlined.
There are even apps directly made for optimizing cash flow.
Make business decisions that not only help your business grow but do it efficiently.
This will help save resources in the long run and optimize processes to minimize cash flow issues.
it’s possible for you to check this guide for some effective methods to scale your business.
However, even for small businesses, a proper business plan is essential.
A proper plan ensures the smooth working of business operations and minimizes mistakes that could lead to business failure.
Many websites offer free business plan templates,BplansandPandaDochave nice templates to get you started.
You wont be the only one who needs to look at it.
Maybe even addinfographicsas well.
As I already said, a business plan is crucial for your business success.
So its worth getting help from a professional to help you create a business plan.
There are also websites likeSCOREwhere you’ve got the option to hire a mentor for one-on-one sessions.
Poor Marketing
Bringing your product/service to the market isnt enough to be successful.
you should probably promote your offering to potential customers and gain customer trust to convert them.
Your business wont thrive if your competitors beat you in marketing, even if you have a better product/service.
Poor marketing is responsible for14% of failed businesses.
To make matters worse, marketing is extremely competitive in the current times, mainly due todigital marketing.
you should probably promote your products/services both offline and online.
However, before the tips, I am listing some resources that should help you learn more about marketing.
Knowing your customers iscrucial for creating your marketing strategy.
If your customers are mostly young people, social media marketing will have a major impact.
Throughout your marketing channels, keep your brand consistent.
Your audience needs to remember you for your unique points and resonate with you.
Here are some reliable ways to build an online presence.
The business failure reasons I have listed here and other reasons as well, mainly stem from bad decision-making.
Statistics play a very important role in making good decisions for the business.
Improving Business Analytics
Digitization of business operations should be your first step toward better analytics.
Digital analytics tools need data in digital form to be able to process it.
you’re free to start with digitizing documents and then move to digitizing main operations.
Thankfully, most of the business apps have built-in analytics tools to provide insight.
Below are some examples of business tools that can digitize business operations and provide analytics.
Remember to always choose tools that integrate well with each other.
If your business tools dont integrate, then it will create data silos and negatively impact business analytics.
However, lack of knowledge and bad decisions cause issues that eventually lead to business failure.
