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  • Writer's pictureGreat Companies

Learning from Mistakes is the Key to Success!

Jul 8, 2017

Failure is a part of running a business. No small company wants to go out of business, yet many do. And the younger the company, the greater is the possibility that it will. It is necessary to device a proper plan and move according to it.

Some reasons why companies fail to function smoothly and some tips to avoid them:

1.The main motive to start a business is generally not clear and not defined properly. If the business is set up only for the purpose of earning loads of money, or that you wouldn’t have to be answerable to anyone, this reason to establish a business is generally not considered to be appropriate. One needs to have a clear objective of why they want to start a business.

2.Without careful, methodical, strategic planning -- and hard work -- success would not follow. The same could be said of most business successes. It is critical for all businesses to have a business plan. Many small businesses fail because of fundamental shortcomings in their business planning. It must be realistic and based on accurate, current information and educated projections for the future. Hence, a properly framed plan is important to drive the firm ahead.

3.A business, these days must have a website and a social media presence. At the very least, every business should have a professional looking and well-designed website that enables users to easily find out about their business and how to avail themselves of their products and services.

4.Poor management skills can also lead to failures. Dysfunctional leadership in the business trickles down and affects every aspect of your operation, from financial management to employee morale, and once productivity is hindered, failure looms large on the horizon. Learn, study, find a mentor, enroll in training, conduct personal research – do whatever you can to enhance your leadership skills and knowledge of the industry. Examine other business best practices and see which ones you can apply to your business.

5.Having a unique feature that sets the enterprise apart from the others also plays an important role in preventing failures. What sets your business apart from competitors? How do you conduct business in a way that is totally unique? What are your competitors doing better than you are? Develop a customized approach or service package that no one else in your industry is using so you can present it as a strong value proposition that attracts attention and interest.

6.Starting a business without sufficient operating capital can prove to be a not so thought about idea of business. Not only that but many new business owners underestimate the perils of riding the cash flow roller coaster. They generally ignore the maintenance of budget and continue with their activities without giving it a prior thought.

7.A final reason worth mentioning for why companies go out of business is underestimating the competition. Even if you have a sound business model, plenty of funds to operate and the necessary management skills to be successful, you still face one daunting challenge: the competition. Instead of underestimating the competition, one should always try to learn something from them and apply it to their own business to stay at par.

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