Running a business is one of the desires of every individual who wants to have financial independence. Likewise, business ideas come to mind as a means of creating wealth and multiple streams of income.
However, considering the risks and challenges which come with starting a business — many people are unprepared for this challenge. They believe that because someone else succeeded in being an entrepreneur — it simply means “I can also do this business, and succeed.” Such people failed to take a critical look at the risk associated with being an entrepreneur.
There is a general analysis on how long business last – 20% of small business fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.
To create a business that will strive and stand the test of time, certain business killers must be examined, and solutions must be provided for such. Just like the scientists develop a hypothesis to drive their research, hypotheses are formed, and then experiments are designed and executed. This approach can also be adopted in this view, using a good killer question to frame the hypothesis around the most likely reason a business will succeed even at downtimes.
1 – POOR PLANNING
It is expected that every business is formed to generate revenue, providing goods and services, solving problems, creating employment and wealth. Many entrepreneurs failed to put these into consideration at the kick-off, which eventually affects the business in the long run.
2 – LACK OF CREATIVITY
Every business has a peculiarity in service delivery, but lack of creativity or innovation can kill the business in no time. Entrepreneurs must be very proactive and be trendy from time to time. Digitalisation is the order of the day, so go for it. Swift change to these innovations is key for startups to consider when thinking of starting a business.
3 – INEXPERIENCE
Field experience is different from the imagination. Running a business required thorough experience of such terrain, and the absence of that kills business easily. Taking a perspective look into unknown territory is what establishing a business looks like. You cannot expect everything to work perfectly as you plan. As a business owner, you will be faced with many setbacks, so instead of taking all on yourself to solve alone, leverage on the experience of people who are vaster.
4 – LOW SELF ESTEEM
You may have low self-esteem when you don’t value yourself as much as you should. Likewise, operating in a business environment with brilliant competitors can be very intimidating. That may lead you to tolerate unhealthy situations and people. You consistently accept failure and avoidable error. These negative thoughts will steal your will to win and compete; you will need confidence as you access all the good things that life has to offer. Therefore, change your mindset and move on with courage.
5 – LACK OF CUSTOMER RELATIONS
One major reason many businesses fail in their second and third year is due to lack of recognition of their first customers. Those customers are often the baby boomers who trusted even when they didn’t have a reason to believe in you and your business. Ignoring these customers people can kill your business. Use them for your major source in a referral campaign and thus helps your business to grow as quickly as possible. Nurturing these people will give you a lasting impact to keep your business in existence.
6 – WRONG STEP AT THE WRONG TIME
Having the mind of being a successful entrepreneur is good, but the process but never be compromised. If not, the investment will be a failure. You must put in place every machinery to succeed in your business.
Follow every step carefully. However, overthinking the big success is not. Some of the entrepreneurs who fail have been thinking of growing big and yet have put little action to work.
7 – SETTING UNREALISTIC GOAL
Starting a business should be done by expecting the worst at the beginning which many entrepreneurs fail to accept. The level of uncertainty that today’s entrepreneurs face is something truly unique. We’ve been living with uncertainties forever. You need to translate your foresight into the analysis as to how your business can keep standing. Take cues from other businesses in your space and stay ahead in creativeness, innovation, and technology.
8 – DISTRACTION THROUGH CRITICISM
Criticism is a natural part of the business. If no one is criticizing your business, then you are not doing the business correctly. As an entrepreneur, much of what ultimately happens is out of your direct control. However, look around and see if you can see what others don’t and anticipate the unexpected. As an entrepreneur, you will find ways to influence outcomes that benefit those you serve. Sometimes critics can have valuable advice, even if they frame it rudely. You might not like to hear complaints, but they might help you improve your business.
9 – NOT KNOWING YOUR COMPETITORS
You cannot be operating on an island as an entrepreneur, there are levels of others sharing the market with you. But if you don’t know what they offer and how they work, how will you set yourself apart? Customers need a reason to switch or stay, and the only way they’ll do that is if you give them a good reason.
10 – NEVER RUN OUT OF CASH
Nothing could be more frustrating than being broke, the same goes for business operations. Availability of cash to run the business is a great surviving strategy. In the sense that, leverage can prevail against opportunists, especially suppliers who tend to hoard items or hike their prices. It can also avail ample chances of easy diversification and expansion.
11 – MAKING UNGUIDED DECISIONS
A lot of entrepreneurs start with a team of one. That’s okay, but it’s not easy to start and grow a successful business all by yourself. You need some advice—some good advice. Whether you get a business mentor, a business coach, or create a board of directors. You need someone in your corner to bounce ideas for you, to help you make decisions, and talk through problems.
12 – POOR LEADERSHIP
Leadership matters in growing a business. Lack of it kills a business faster. If your business is big enough to have a management team, you want to make sure every member is willing to think outside of the box, energize the company, and be willing to take a few risks to grow the business.
Growth stops if the leaders are either too rigid or incapable of envisioning a new stage of growth and aren’t breathing excitement and new energy into research, development, and sales. In other words, you need leaders with vision and the wherewithal to make that vision a reality.
13 – LACK OF FINANCIAL KNOWLEDGE
If you’re just paying bills and depositing what’s left into the bank, you’re making growth extremely difficult. After all, how can you grow if you don’t know how much money is going in and how much money is going out? That’s your cash flow, and keeping a good handle on it will help you. You need a good accounting procedure in place if you plan to attract new customers, reach new markets, and boost sales. Whether you hire an accountant to help you or invest in software like Sage or Caseware, you need to track your money so you can plan for growth.
14 – LACK OF MOTIVATION
Every effort has a corresponding reward. In business when you ignore incentives toward customers, employers and investors can be destructive. A strategy must be adopted to reach-out to every stakeholder of the business periodically no matter how little.
Whichever form and at any stage your business is experiencing challenges, know that it is peculiar to every venture. All you must do is to give room to analysis the situation – take a constructive step towards regaining your ground back. Though the situation may warrant losing little or so much, never give up, take the next good step, and you’ll remain afloat.
AO Professional Services
1st Floor, Lamlat House, 270 Ikorodu Road, Obanikoro
GPO Box 20434, Ikeja, Lagos
Tel: +234 817 000 0195