You’ve probably heard that a high percentage of start-up businesses fail with the first year or two.
It’s true. But, why do so many fail?
The following are among the top reasons:
# 1 The owner(s) had no previous experience in the business field they plan to enter.
Example: Just because you love to cook is not reason enough to open a restaurant. If you really want to own a restaurant, get a job in a restaurant for 6 months. Learn firsthand what it takes to manage the business.
# 2 Lack of family support.
If your spouse, mate, or other family members are opposed to your business idea, your home-life may suffer and in turn affect your enthusiasm.
# 3 Under estimating the amount of money it will take to maintain the business until it starts generating profits.
Look beyond the start-up costs.
# 4 Failure to write a Business Plan (see # 3 above).
# 5 You plan to start and grow your new business by offering prices below those of your competition.
This seldom works out well. Your competitors can lower their prices to match or beat your prices for a much longer time than you. It’s likely they are profitable, so lowering their prices simply decreases their profit margins, while you sit wondering why you are getting little or no new clients.