2 major causes of business failure

Most of us think that the only thing you need in order to start running a business is money. If you have money you can do business. That’s what they thought, but money cannot handle everything.

There are 2 major reasons why businesses fail. First, a lot of people presuppose that putting up a business is simple if they have the money plus the technicality-know-how of the product of the business. A brilliant thinker cannot be the entrepreneur at all times. Like for example, a dress maker who wants to be in the dress shop business. The dress maker is good in making the product but she can’t promote it, she can’t do financial bookkeeping and most of all she can’t manage people. Probably she can handle it all out of gut instinct but more of her decisions are crucial for the business.

Second major reason is the product sameness. How can you distinguish your product from the competitors? What makes it unique? A unique selling point or USP is needed in marketing your product. It is a distinct feature or benefit that separates your product from the others. If your dress shop is located in a place full of other dress shops and gown rentals, and you don’t have that USP, more or less you’ll have to compete with them in other way which in this case, can be the cost or fee of making the dress. At the end of the day, no profit gained.

Setting realistic goals, good and flexible marketing plan and execution of that plan are a must but what else to do? Attend business seminars; educate yourself on how to run a business; learn accounting; learn marketing; or better yet seek for professional help.

Image Source: GetEntrepreneurial.com
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