The world moves too fast. Its fast movement is facilitated by different things like technology and people’s lifestyles. To move at pace with the speed of the world. Most people work here and there to make sure life is sustained and maintained. This post explains in detail why businesses fail, by relating it to the changes happening in the world.
Due to the changes in people’s thinking, the ability to work and the influence of technology. everything under the sun has become to be a business.
Everything like plant leaf roots, expired material, iron, sand, food, and ornaments. And everything available under the sun is business. But despite the existence of this range of opportunities. Do you think why some people fail to drive their business?
Everything can be a business. But business can not be everything. The business has many ways to run it. And it sometimes gives a wide range of opportunities, ways and tacks for its owner to stand on it and play a battle wisely.
Managing a business is not simple. This is because not anything that you sell can drive the net income that you’re looking for. Before I jump to the clarification of why businesses fail, read this story.
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I have a friend who is very excited about business, he desires to become successful by running a business, In September 2020, he started a small entrepreneurial business, and he was selling eggs.
He took eggs directly from farmers and he started to distribute them to people’s shops and people’s restaurants sometimes he sold his eggs to families for home food.
A week later after he started his business. I tried to contact him to find out how was the business going. When I communicated with him he answered me that, his business was fine and he was making some income from it.
I was happy to hear that. Because my pleasure as always to see someone moving forward and becoming great by him or herself.
A month later, he called me on my phone. And he was talking about his business going down. He blamed himself, he had no money to manage his business again.
This happened because he lent his eggs to his customers until his business capital perished away. So now he has nothing and he was asking me to give him some money to continue with his business while waiting for his customers to pay for their debts.
Why Businesses fail to grow and serve people
After this so let’s jump down to our core focus to discuss why businesses fail.
Below are the reasons based on the research and vivid evidence of why businesses fail. At and, you need to understand these reasons in detail. In order to avoid being inflicted or hijacked into failing to start or run your business. Businesses fail because;
1. People fail to define their business model.
Most people start a business without being clearly defined their business model. What is a business model?
The business model is the mechanism of running your business to generate profit and grow your income company. The business model details all of the ways, and processes that you shall be applying to push your business forward.
It details, the production plans, distribution plan, marketing, product delivery and all the issues required for a business to grow or generate a profit.
Most people start their venture without really knowing how they are going to dive into the system and make a profit. Hence when they start up their venture they always become promised by the flow of profit without knowing the vessel that pulls in such profits.
Your business model is the road toward business prosperity or growth. If you don’t understand what way you should go, then you’re lost. Most people start their businesses while they are lost. Your model your way path, your model your guide.
2. Businessmen fail to understand the problem to be solved.
Jeff Bezos once said, “To become a millionaire, you must solve a certain problem in your community”. Here what matters is to understand what need is missed in your community. And what people need.
So the problem with us, we always launch our venture with the promise of profit. But we don’t define the extent of an issue to address in our community.
The higher the problem the greater the way you can make money via it. So unclear definition of the problem makes us launch our venture and a few months we run out of it. To understand people’s needs or the problems that exist in your community.
3. No deep research.
When I was in university, our teacher of a planning subject asked us to mention ways which can help a person to understand a problem for the project. I remember I didn’t raise my hand to answer but my colleague answered the research of the popular way to see the problem.
What is business research?
Business research is the process that involves obtaining, recording, and analysing in detail the information related to business.
This is done to have detailed information and understanding about the kind of business that you need to start. In business, research is a must when you want to start any kind or form of business.
Conducting research helps a lot to give you detailed information on the issue you’re going to be dealing with or tackling.
So the problem starts here. Most people nowadays wake up in the morning and open up a new shop or a business centre or start up their project.
Without any research being done to understand the nature of their businesses and a full framework of their work. This is a very big mistake. I once did it in my life. The result was I lost my money.
All of the capital that I invested was nearly out this was because I started withing a clear understanding of what I was going to do. Better and critical research is a must when launching a new business office.
4. Power of Challenges.
I quote “If you can not push challenges down, they will push you down”. Challenges can push you down. That is what happens to the one who runs the business. Challenges can cause businessmen, and to run out of business.
In business, the challenge is a must. You can not escape the challenges in business, and no one who ever solved and overcome them. No one who is running a business without being inflicted with challenges.
So we perish out of the game of business simply because challenges defeat and win us. To become successful in business, understand the challenges, precinct the challenges, and prepare yourself to defeat the challenges.
5. People start businesses which they can not manage.
This is a common problem for many businessmen. Most of them start their business because someone advised them to start. Some of them become promised by the needs of the people and profit without understanding their ability to manage such a business.
Recent research about projects and business recommends that, for a person to become successful in a business, he/she must start a business that he/she will feel better being named by the name of his/her business, for a business to prosper must inspire the owner and motivates him in all situation whether in losing or happier time.
But this is contrary to new beginners, some of them fall into a kind of business which they do not want to be named for, and sometimes they are not confident to stand and explain to others and share their progress with other people.
This is a very big problem. You can not step ahead if you don’t love what you are doing. The first formula to prosperity is to love what you are doing.
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Loving only doesn’t matter if you do not have the ability to maintain and manage your business properly. Understand the opportunity you have. Measure your ability then start your business by balancing the opportunity available.
Understand the ability to drive out that opportunity toward making money or growing your business. If the opportunity for your business becomes greater than the ability you have to maintain and run your business, then your business is likely to fail. The demand (customer) will be there and increasing but managers will have no ability to serve the demand.
These were the best 5 reasons why businesses fail. Understanding these reasons you will have the ability to think and abstain from being hijacked by them.
This will help you to have a better future for your business while enjoying profits and the growth of your business. I would like to understand how this article has helped you.
Also if you have understood why businesses fail. To make me know leave a comment below. This will inspire us to research more articles that will power your life and change your destiny.
