What is the reason that 95% of the company gets closed within 5 years of its incorporation?
Today every youth wants to do his own business to turn his dreams into reality as soon as possible and to get reputed in life in which there is nothing wrong. In this competition, without understanding the specifics of the business, he starts a start-up. He has to bear the brunt of the lack of the right business knowledge and experience by losing his dream business.
On the other hand, when a person troubled by the day-to-day life and the busyness of the office goes to the office every day, he thinks that I wish! If I also had my own business, I would not have to go to the office every day and face the anger of my boss. Due to this thinking, some people start their new business, but in no time there comes a time to close this business.
According to statistics, 50% of the businesses close in their very first year and 95% of the businesses are closed within 5 years.
Now the question arises that why does business fail even after starting your own business?
What are the mistakes that make the business stop in its early stages and the business which is started after dreaming of heights becomes a cause of disappointment?
So let’s talk today about the main reasons for failure in business, which make the businessman/businessman a failure by failing the business-
Not having enough money to set up the business
It has often been seen that many new businesses, despite good ideas, get closed within 2-3 months and the reason for this is that the budget is very low. New businessmen start their business by taking only 2-3 months of funds and when no benefit is visible at this time, then a tough decision has to be taken to close it because there is no fund to invest in the business. Is. To avoid this difficulty, it is important that sufficient funds should be kept before starting any business because not every business is established in a jiffy, rather it may take 1-2 years to get established and in such a situation, the business can get profit. It is very important to have enough money to survive even without it.
Weak management :
To start a business, apart from money, it is also very important to have management. Often, in the excitement of starting a business, new businessmen forget that to grow their business fast, they will need a great team that will cover important areas like finance, production, and selling, and through this teamwork, the business will be promoted. And the sale of the product can also happen. But this mistake made in business proves to be very difficult because instead of selecting experts in every field, unskilled employees are selected and as a result, the graph of the business goes down. To make any business successful, it is necessary that all the members of the team related to that business should be proficient in their work and should also be able to maintain their product in the market.
To start a business to make short term profit/profit as soon as possible :
It is quite common that the goal of starting a business is to earn as much money as possible. But you know that every work has a principle, just as it is the principle of doing business that instead of focusing only on earning money, try to remove the flaws and complaints related to your business immediately because If you are happy with the fast sales of one of your products and think only about making more money by increasing its quantity and by reducing the quality of that product and bringing it to the bad product market, then it is certain that you will not be able to earn much profit, Rather, you will have to bear heavy losses due to poor quality product and your reputation will also fall. The reason most new businesses fail is that the emphasis is on quantity and packaging rather than quality. Good packaging is important but the quality is more important than that.
Investing more money than necessary in new business due to lack of experience :
In the excitement of starting their own business, new entrepreneurs often invest a lot of money in their new business without thinking, but only investing money does not run the business, but the demand of the market is also very important and their products and services. After making a lot of investments without understanding, when profit is not available, then there is no other option left except to close the business because already the investment is made too much and profit is not available accordingly.
Not understanding the demand and supply of the market :
Many times it also happens that before starting a business, instead of understanding the need of the market, they start providing the service according to their mind, whereas it is very important for the businessman to know what is the demand of the market and the needs of the customer. What is the need In such a situation, new entrepreneurs unaware of the needs of the market are neither able to earn profit by promoting their products properly, selling them nor are they able to satisfy their customers, due to which they keep on failing in business?
Lack of marketing skills :
To make a profit from any product, first of all, it is important that the marketing of that product should be done well so that more and more people can know about that business and that product. When a product is marketed well, more and more people know about that product, and the number of people using that product also increases, but due to weak marketing or lack of marketing, the product is of good quality. Even if it is not recognized among the people, due to which there is a situation of loss.
Time Management / Investing less time than necessary :
Many times people start a business thinking that if they have their own business, then they will have to work less time, and once started, profits will continue in the business. This thinking becomes the cause of huge losses and failures because starting a new business means investing a lot of your time in it. It takes a lot of time to understand the requirements of the business, manage the team, manage the products and services properly and keep working on new ideas and if the time is given less than the time required for the business, then the business will fail. It doesn’t take long to stop.
Business location can also be the reason :
Sometimes its location also affects the business because if your business location is such a place where people are easy to reach and people of that area need your products and services then it can prove beneficial for your business but if If your business is established in a place where it is not easy to reach and where there are already a lot of companies providing products and services like you, then such location can also affect your business.
It is really commendable to have the desire to start your own business, but if you are afraid of failure even before starting your business, do not fear. It is natural to feel a little uncomfortable before doing every new job, but if you enter this field with full preparation, then you too will soon be able to taste success. For this, first of all, you have to learn from the mistakes of those entrepreneurs who started their business without their enthusiasm and preparation and then had to close it too. Learn from the mistakes of others, understand the need of the market, give utmost importance to quality and accumulate enough amount of your time and money and get on your way to becoming a successful businessman.