A statistic released by the ABS states that the majority of businesses will fail within three years of their being started. While it’s a statistic that might sound frightening to some, I’d say that for people who are willing to learn from the mistakes of those that have failed before them, you shouldn’t allow this to dissuade you.
In this article I’m going to outline a few things that I’ve learned with my experience working on businesses that have failed. Mostly there’s a few key reasons as to why this occurs, and by outlining them I hope I can give you an idea of what you can do to prevent it from happening to you.
How are you different from your competition?
There’s a term known as USP which every business should know, Unique Selling Proposition. A business without a good USP doesn’t give a customer a reason to choose them over another business, and will struggle to define themselves or their brand. Your USP not only differentiates you from your competitors, but can serve as a way to ensure that you’re sticking to what your business does best.
Do your customers know how your product helps solve their problem?
While it’s obvious to you how your product or service is applicable to your customers needs, if you don’t clearly communicate this then you might find your customers not making the same connections. It’s important to ensure that when you’re communicating with customers that you ensure that you’re reminding them of their core problem that you’re offering a solution to. Good communication will keep customers happy, and your brand strong.
Are you solving the customers needs?
Customers come to your business because they have a problem or need that they want to resolve. Your customers will come to your business as long as you can make this happen, and as such you should always take the initiative to get to know your customers. Building a strong customer relationship gives you the information you need to improve your business, and keeps your customers loyal and happy.
Is your business plan profitable? Is it scalable?
Do you know where your business will be in the future? Do you know what you parts of your business need work, and which are running smoothly? It’s common for businesses to have problems with growth over time, and this is usually due to a lack of a reliable business plan. It’s important to set sustainable, achievable steps for yourself as you and your business grow, in order to prevent unprofitability. If you don’t have a business plan, you’re planning for disaster.
Are you looking after your businesses most important asset: yourself?
It’s important to remember that you are a part of the business as much as your product is. You need to make sure that you’re keeping up with trends and updates in your industry, and learning new things that you can use to augment your product or customer experience. If you’re lacking in a certain aspect of your business, don’t forget the capabilities of the people around you. Most importantly however, keep yourself healthy. Running a business is a difficult, stressful job, and you should ensure that you don’t let your health slide.
Finally, it’s important to surround yourself with people who can help you and who you can rely on for assistance. Good entrepreneurs have wide support groups of people with deep knowledge of various areas, so that when an issue occurs that is outside of their personal knowledge, they can reach out for information. It’s important to have a group of people who work well with your strengths while you completement theirs, in order to create value and growth for everyone involved.