It’s not difficult to create a business! But it is difficult to create a profitable business that survives beyond the first year!
Research suggests that companies that fail in the first year do so, due to a lack of commitment on the entrepreneurs’ part or the business idea were condemned from the beginning.
Lack of commitment
The contractor starts a business but they do not totally believe in the concept, product or service and do not quite the hours for the business to be a success. Perhaps they fell into the management of their own business because of redundancy, but would prefer to be employed in a senior position in a large organization. You often see second generation businesses fail for similar reasons. The offspring of the original entrepreneur does not have the same commitment or enthusiasm and the company undergoes a slow death. If you do not believe in the product or service you offer, it’s unlikely that your customers can do it. It is not necessary for it to be the best product, it must simply be the best product or service in the sector or the market sector. If you do not believe in the product or service, change it until you do.
Bad idea of the beginning
Many companies are condemned from the beginning. The contractor is blinded by their idea and does not listen to the reason and the product without thinking properly to the business concept.
An example can open a bar when many closes in the same area. Unless it’s a new concept in the bars, it is unlikely that yours succeeds while the rest fails. So do not try to think of another area to enter.
Opening a CD sales shop when music that buys the public, get their music online.
The contractor believes in a way that their business model is different when, in reality, the concept has been proven not to work again and repeatedly.
There was a moment when many farmers wanted to open golf courses. They thought they would do more money from the earth with a course than agriculture. In reality, many farmers had opened golf courses that there were not enough customers.
Warning: Do not expect to get good advice from lawyers and accountants. They are not paid to give advice on whether the idea is good or bad and if your business is a success or it fails.
How do you get these two potential obstacles?
Look at the bottom of your mind and your thoughts and decide if you would be happy to run a business, even if it means long hours and that the grass being actually greener on the other side of the fence, but you are at least your own boss. In many cases, this must be sufficiently compensated since often employees earn more than entrepreneurs. Do you start a company for the right reasons?
How to avoid starting a business that is doomed to failure is slightly more difficult, but you can minimize the risk by:
Talk to friends and other corporate owners
Appreciating that you may not succeed for the first time
Make sure you have access to resources to give the business a chance
Try to choose a growth sector such as Internet sales, energy conservation, security as opposed to areas where businesses leave the market
Be prepared to offer another business idea
You can create a business in a declining sector and succeed, but your business plan will have to reflect that. In 2009, business sectors with the highest bankruptcy rates were: Builders Restaurant Shops
Starting a business is a long-term commitment. One can sell a business but it takes time, sometimes years and if it just starts, it is unlikely that you can recover your initial investment.