BFS Partners have witnessed many businesses fall 7 times but have gotten back up on the 8thand have succeeded after failure.
We have prepared for you 7 major reasons why 80% of businesses fail within their first 2 years of operation.
1. Register for an Australian Business Number (ABN) which identifies your business.
When thinking of starting a business you need to ask yourself “Why am I really starting this business?” if the primary reasons are so that you can be self –employed and be your own boss, or if you want to be in business to make a lot of money or if you think that by having your own business you’ll have more time with your family, well think again because it is going to take you years of hard work to achieve.
The right reasons for starting a business which lead to building a successful business include:
- You must have a passion for what your business operation would be and believe the service you’ll be providing would fulfil a real need in the marketplace.
- You must be mentally and emotionally strong because you need to be standing frim on your two feet when others throw in the towel.
- Ready to accept your failures. If you’re able to use your failures as a learning curve because mistakes are what makes us humans. So, if you make a mistake that’s okay capitalise on that mistake and learn from it. If you don’t fail, you won’t grow as a business.
2. Poor Management
New business owners frequently lack relevant business and management expertise in areas such as finance, purchasing, selling, production and hiring and managing employees. The best thing to do is seek help from an experienced business owner or you can outsource the work to competent professionals.
3. Not enough capital
A common mistake many businesses make is going into operation without having sufficient operating funds.New business owners often don’t understand cash flow or underestimate how much cash they will need to get the business up and running and are usually forced to close before they have a chance at success. It is important to take into consideration that many businesses take a year or two to start making a profit which means you will need enough capital to cover all costs until you start making sales which will cover these costs.
4. Location
Many new business owners don’t understand how crucial it is to set up your business in alocation where it is convenient for your target market to reach. I mean you wouldn’t want to start up acharcoal chicken shop near the farm, you would position in it a place where there aremany people travelling beside your shop so near train and bus stations and in the CBD of the suburb you have chosenwould be a good location for a charcoal chicken shop.
5. Lack of planning
It is very critical for all businesses to have a business plan. Many small businesses fail because offundamental shortcomings in their business planning. It must be realistic and based on accurate, current information and educated projections for the future.
To get yourself a tailored business plan which is tailored for your business depending on your circumstances call us today as BFS Partners have experts who will help you put together a successful business plan.
6. Overexpansion
A leading cause of business failure, overexpansion often happens when business owners confuse success with how fast they can expand their business.
As you are growing your business you don’t want to get to confident, allow yourself some space to test whether your business will continue to be a success. If you have minimal liabilities and have a great amount of assets after 5 years of being in business, then it should be something worth thinking about.
7. No social media appearance
As technology has developed so much over the past decade and will continue to develop it is important to use it our advantage. With the internet presentyou canaccess anything you want at any timeso it’s importantthat your business makes it to the internet. Advertise on google and yahoo create a Facebook if you neglect the internet you won’t be able to keep up with your competitors.
Although you might have fallen 7 times but get back up one more time and be even more motivated to achieve success because there will always be light at the end of the tunnel.
If you need a tailored business plan to help you avoid failure and to achieve success quickly please don’t hesitate to contact BFS Partners on (02) 8094 8990 as we have experts in providing tailored business plans.