Business Consulting - How to avoid business failure

What is the survival rate of businesses? Statistically, about 66 percent of new surviving two years or more, and 40 percent survive six years or more, according to the report "Redefining Small Business Administration. In addition, companies that have employees (instead of one-man shops), university owners, and those who have a good funding tend to survive longer. also supported by the numbers of the study, complex manufacturers have a better chance of staying alive with the service and retail businesses. With this information as background, I have compiled a list of seven causes of failure from personal experience and informal discussions with local entrepreneurs. Hopefully, we can learn what not to do and increase our chances of survival!

1. Inability to understand the market, customers, and buying habits of your customers. Two simple questions: Who are your customers? And because they spend their money with you? You should be able to respond in a clear in one or two sentences. Customers are the only people who put money in your account. Without them, did not survive.

2. Failure to understand and communicate what you are selling. You must clearly define the value proposition. What do you do that can help or benefit me? Once understood, ask yourself if you are communicating effectively. Your market in touch with what you're saying?

3. Insufficient funding. Cash is king. If you do not have enough cash to carry you through the sales cycle and downward trends, the prospects of success are not good, when companies are looking for lenders to provide that money, he soon discovers that the sources of funding are fastidious and difficult to please.

4. Failure to anticipate or react to competition, technology, or other changes in the market. It 's dangerous to think that what you did in the past, it always works. Challenge the factors that led to your success. You still do things the same way despite new market needs and changing times? What is the competition doing differently? As a new technology is available? Those who fail to let go obsolete.

5. Overdependence on a single customer. Pay attention to the sources of income. If you have a client who is providing a majority of your income, ask yourself what would happen if they left or went of business. Where would you be? Every time you lose a customer so great that would close up shop, look out. Having a large base of small customers is a sure hit.

6. Failure to define your product / service offered. Trying to do everything for everyone is a sure road to failure. Spreading yourself too thin, quality decreases. The market pays excellent rewards for excellent results. Great results come from doing what you do and doing well again and again.

7. Mismanagement. Managing a business includes a range of activities: planning, organizing, controlling, directing and communicating. The cardinal rule of small business management is to know exactly where you are at all times. A common problem in view of the success stories is growing beyond the resources or management skills .......