4 reasons why a business fails
It can be said that 8 out of 10 entrepreneurs who start their projects fail in the first two years, this is due to certain shortcomings and points that are not given sufficient importance and that therefore, their businesses do not arise or they just collapse from one moment to the next. In this article we will give you some reasons that are considered the main causes of the little success of entrepreneurs, so that when you start your venture or if you already have it, analyze them and do not fall into these mistakes.
1. Business start for wrong reasons
In our article “Steps to start my company” one of the points was “That our motivation is not to do something because it is fashionable” since as time goes by, the fashion changes and your business may fall. Another wrong reason may be to start a company because we want to increase our profits or because we simply have spare time and we want to occupy it, due to this, we start something without planning it well and without a clear vision of what could happen in the future, this is more common than what it seems.
2. Wrong planning and lack of budget.
Not having clear planning in every way can be a critical flaw for our business, planning only certain aspects of what a company is can leave our project halfway. It is extremely important to create lists and have visions of different scenarios through which our company can surely pass and in which the budget is of utmost importance, these are:
- Launch: This will need a very good budget and excellent planning since it is the moment in which we have the opportunity to bring out the big guns and make ourselves known in the best way, where we show our company as the best option among the competition, therefore, the investment in our advertising, our point of sale, the implements that make it up and the quality of our product or service must be the most important thing.
- Recognition: This point is the result of having done or not the first step properly, if we already have our business well structured, recognition will be given from aspects such as: improving our services or products, having an excellent relationship with the client, provide quick and effective solutions, have a clear budget for advertising and all the media plan that our type of business requires, and clearness about our income and expenses to identify if we can reach our long-term goals and overcome moments of crisis.
- Maintenance: Maintaining our company may be perhaps the most difficult part of the process, we may have been successful in launching and recognition, but maintaining ourselves can be a struggle if we do not have a STABLE AND ORGANIZED ACCOUNTING with which we can continue to be firm over time.
It is extremely important to be clear in the accounting and legal affairs that we have in our company, since accounting will change as we grow in the market, have more employees, or want to have some expansion, and it is here that many people come to failure, due to not having a good consulting on how to make investments, keep their accounting books, or be informed of the taxes they are forced to pay for the kind of registration that the company has with the government.
3. Lack of leadership
We can have very good business ideas, but if we do not have a leadership character at some point things will decline, we must be able to take on challenges and problems that arise in any process of business growth, in which the leading person is the one who faces issues and has the power to provide solutions and take over the issues that have been going on.
4. Bad accounting
Surely for an entrepreneur the most difficult part is keeping the accounting of his company since he will have to deal with invoices, tax returns, payroll, among many other accounts that at some point will be utterly stressful and will become a burden for everyone. That is why it is always recommended to have an ally and have an external marketing department that diminishes the accounting burden and always keep it up to date and orderly, to be clear of absolutely all the expenses and profits that we have but above all so that In times of difficulty, these external agents can create viable strategies to get out of the crisis. Accounting can be a Trojan horse for many serious problems within the company, large, medium or small, and it is often the break that brings our company to the ground.
Jpg provides its services to alleviate the accounting burdens of all the companies that feel that they are going through a difficult time or also that they want to start in the best way any project that includes having a very stable accounting, which is why we have a group of well-prepared professionals to provide the best possible results by creating personalized strategies that will help constant improvement.