It is obvious that globalization took hold onto everyone’s way of doing business. Big chains like McDonald’s and KFC are taking over all the bigger cities.
Do you ever feel like all the big cities look alike precisely because of that?
There is a huge main street with all the same stores like Gucci, Armani, some of the less expensive ones like H&M. Food chains, as previously mentioned, like Domino’s Pizza and Burger King. They are all taking over towns all over the world.
And what can a small business owner do about it?
According to statistics, roughly 20% of new businesses survive past their first year of operation. That was the case two decades ago and is still the case today. But what about the rest 80% of small business owners?
Here are 7 reasons small businesses fail after their first year?
- There is no market need for their services or products
- They run out of cash
- They don’t have the right team of people around the idea
- Some of them are outcompeted
- They have poor product offering
- They are ignoring the customers
- Have bad location
So, if we look at the reasons why these businesses failed, it is not big corporations’ fault that small businesses don’t get their chance to shine.
Here are 7 ways how you can avoid failing after the first year of your startup
Investigate the market
You should first thoroughly investigate the market. You have an idea of your startup, but the market needs to answer whether they really need what you have to offer. If your startup is working with beauty products, you have to check up what it is that the market didn’t get so far. After that, you should get out on the street and ask random people that don’t know you whether they would buy your product. In that way, you will be sure whether you will have the people buying your product, or you have the false idea of your product.
Do you have enough money?
Making financial statements on monthly or weekly basis is a tough thing to do. It is completely understandable that you do not consider it necessary. But it should be done as often as you physically can. Why? Because you have to know where your money is going and your exact cash flow in every moment. It is only in that way that you will have the real impression of your business liquidity. And you will know whether you have to borrow the money or to save the money in some place. It takes just two weeks of not noticing the small details of your finances to go into the risk of bankruptcy.
When you are gathering the people around your idea, bear in mind that they should be as passionate as you are about the project. If someone from the team lacks the passion or commitment towards the goal, it will pass on to the other team members. If that happens, the startup is unfortunately doomed to fail since there are no strings that keep the team motivated enough around the idea of the startup. Just observe and listen to all the candidates that are interested, and don’t settle for less. You will get to know the persons passionate enough to follow the goals of your company!
Investigate your competition
You should realize that there is always someone else that probably have tried to do the same thing you are doing right now. Internet possibilities are bigger than ever right now. Investigate everything about your competition. Be sure that you don’t copy what they are doing. You should try and grasp which mistakes they are making and correct those mistakes in your own business. Offer something new and different to the market. Or offer the same thing but on a much higher level. It will pay off, believe it!
Widen your horizons
Your offer has to be wide. If you do not have something on your stock – get it as soon as possible. Today, there are no limits! There are so many connections all over the world that can get something so fast that you will be amazed. Turn yourself to customers’ needs and it will bring you positive things on the long run.
Do not ignore your customers
Always keep track on your customers’ feedback. You should know how to say “thank you”, but you should also know how to say “sorry”. There are a lot of corporations that are neglecting their customers as individuals. Don’t be the one doing that kind of business. As personal and real you are towards your customers, as better result you will get businesswise. Always listen to what they have to say and develop your business towards your customers’ desires, not your own!
You can lead your business anywhere you want!
It is 2017 now! All the businesses around the globe are as international as they possibly can be!
If your business doesn’t work where you have started it. Then move to the place it will work. Why not? Don’t be afraid of taking risks. Moving your startup to another address or another country, even continent isn’t the same as it was years ago. Today, moving is easier, and your business’ liquidity is only going to be better if you show you and your team can adapt to various environments.
So, there it is, 7 ways in which you can avoid failing in the world of startups. If you need any more advice or further information about something related to the things listed above, feel free to contact our team, or Casper Ravn-Sørensen as one of the founders of Dotcom-Capital. We believe in your ideas and that you can make them come true!