Beware of the 15 Signs that Your Business Might Fail

We all wanted to make money, and it is our motivator that moves us in a capitalist environment, agree? The question is do you have the right position and decisions to be an entrepreneur and be successful? Here are some reasons that your business might fail:

1.      Lack of experience by the owner

There are a lot of people that venture into business without planning and study the issues about the business. They only think of the good side of the business and fail to anticipate troubles and some weaknesses of it. Because of lack of experience, you might stuck with goods that you bought at higher prices, only to realize that you could have gotten cheaper somewhere else. Putting up your own business is not an easy-to-go job, instead, continuous study and planning.

Lack of experience, also, may result you to a dubious reputation of your employees, especially if they have experience in business. You will then end up being questioned by your people, and losing them, especially those with potential about your business.

Another thing is, if you see that you are losing money or can’t make enough to pay for overhead for the last few months from the start of your operation, you must change plans because there’s a high possibility that you might lose your business and the worst is continuous increase of your liabilities.

Again, you also lack foresight that you cannot anticipate future problems and what must be done soon or much later. This will also result you to poor creation of business plan – your road map to success. If you want to know more about constructing your own business plan, check on my article that I have previously written, “A MUST for Constructing Your Own Business Plan – How to Create Your Road Map to Success.

Can you even imagine that you might be spending money from unplanned expenses or not budgeted items? Yes, because you lack experience in running a business, you must at least consult to experts or individuals with long-run experience in business.

And, with all of these outcomes of lack of experience in business, you will end-up getting mad easily, that you feel as if you always miss out on opportunities and you begin to lose confidence and feel so alone in managing your business, do you agree?

2.      Lack of capital

Lack of capital is one big reason for your business to wind up easily. In the start-up stage of your business, your money runs out even though you have not started your operations yet, because of administrative expenses, personal expenses while preparing your operations, etc.

You have not anticipated or even planned the expenses that you must be spending, since before or after starting the business you are unsure of all capital needs to start your operations and because of the first sign – lack of experience by the owner

Because of unsure capital needs and trying to save some budget, you take on too much risk on used machinery and hope that it keeps on running until you have spend more to get the machine rehabilitated, only to realize you have spent too much on it.

And, you forgo buying important equipment for the business, even if you sincerely believe it is needed for the normal operations of the business, because of some unforeseen financial issues you have spent, such as having hard time paying your people or your suppliers within the few months, other unforeseen non-business expenses that may eat into your capital before you get your business operations going, etc.

3.      Poor Location

Locating your business is important for your success, because, this will provide you good customer traffic and continuous increasing sales, but poor location will give you low customer traffic and continuous decreasing sales.

Strategic location would be in a central business district or secondary business district, but if you were unable to locate your business in these areas, it is a must to study and examine the environment where you plan to put up your business that would give you good ideas, if putting up your business in your chosen place would be feasible or not, and will enable you to construct location planning or the best strategies you can employ.

4.      Wrong or too much inventory

Good inventory will establish you customer patronage whether monetary or non-monetary costs, since you would be able to provide accessibility, availability and reliability. How?

If you have the right inventory, you would be able to cater your customer needs anytime without delay, while with right inventory management wastage would be avoided, since too much inventory would cause product damage, out-modeled, etc.

If you would not eliminate this issue, you might really end up closing your business. And, this would create big disappointment and reduce your confidence of course we don’t want that to happen, right?

We can’t totally eliminate problems in every business. It is a lifetime partner of it that all we can do is to have wise decisions and make wise solutions to every trouble we encounter. For more details of this article, please check on the part II of it on the following days and learn what you must care about your business to avoid unsuccessful journey, big loss and disappointments.

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2 Responses to “Beware of the 15 Signs that Your Business Might Fail”

  1. […] You must plan and think a thousand times before starting your own business so you could avoid failure. However, as they say, “fail a thousand times and succeed a million […]

  2. […] venture. Yes, you might have a stable job right now, but ‘till when you are staying on that job? Failure can always be present, I admit – failure in your job and business I guess. But, like most of […]

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