“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.” –Dave Thomas, Founder, Wendy’s.
In India, thousands of small businesses start every day but within a few days, months or years, they are forced to close their business because of the loss they face. And this happens because they do not pre-plan properly which results in debt and shut down. Given below are the four reasons for shutting down small businesses and along with reasons, solutions are also given to avoid such blunder mistake.
Be Sure Before Choosing Your Product/Service
For a startup, an individual must have an idea about it and the focus on which he or she wants to execute. And many people fail to do so due to which they have to shut their business. It might also be possible that your idea might be extraordinary as well as different but you might not be the right person to execute it.
“Ideas are commodity. Execution of them is not.” –Michael Dell, Dell Chairman and CEO
Be creative, be yourself. This is the only mantra one should follow while starting-up the business. Don’t be a SHEEP and follow the crowd but be the LION who follows himself. The person who wants to start his or her business must not be influenced by the newspaper, social media or the Internet but instead have your own idea while taking the decision about the business or product.
Read Also: No Worry! Easy Ways To Reduce GST Compliance Cost for Small Businesses
There are many entrepreneurs who start their business with keen interest and give their few years to build up the products by investing the savings. The business goes smoothly but the people lose their interest resulting in the debt. So if a person does not want this to happen, he or she must raise a question to themselves whether they will buy their product/service if they were in the position of the customer.
Before starting up your own business, analyze the market and search for the people who will willingly pay for your product because in this world there are people who will appreciate you and your but will not come forward to invest on it. This job must be done by yourself and must not be dependent on anyone to search for you.
Choose the Right and Trusted People
If you have an extraordinary idea for the startup then look for such people who are interested in your business and are ready to be its part and invest in it.
You have the rights to choose the people who will work under you. And this must not only be done by seeing their qualification or degree but also their interest. Give them the job they love to do and are passionate about because this will result in great productivity in your business. You have the strength to give your business productivity and this can only be done by choosing a perfect person for the perfect task.
Ready to Outsource
Don’t try to focus on each and everything instead brings perfection in one thing. The boss always handles the main function i.e. to generate revenue and outsource the other functions.
Given below are the problems that will arise if you try to involve in every function of your business-
You will end up mixing everything because the functions can also be handled by someone else.
Instead of handling the expenses and cash flow by yourself, hire the professionals who can do this easily and perfectly.
Note: If professionals are not hired then you will end up misusing the expenses which will result in the business shut down.
Always remember that outsourcing does not mean that you must be dependent on third party vendors. But keep checking everything to make your business grow and stable. Have knowledge about everything but use it wisely. Be connected to the outsourced functions to get the best results.
Manage the Finance
The main reason for the shut down of the businesses is the problem in the management of finance. If you properly manage the finance from day 1 then there is no chance of shut down of your business. The finance must be regularly tracked too.
Always remember the given below questions to be successful in your career, and business.
- What is your ROI?
- What is the cost to enhance the product/service and whether it is being spent properly or not?
- What are the future expenses and are you ready for it?
During the initial stage, try not to spend much on unnecessary things because that saved money will help you later when you are in need.
Recommended: Top Business Opportunity for Chartered Accountants in India
Try not to make these given below mistakes in the initial stage to avoid unnecessary expenses.
A. Office Space
This is the most common mistake by almost everyone. If you are just starting your business then start it from your house instead of taking an office on rent. Because at the initial stage only a few clients are connected with you and if this circle increases then you can spend money on the office.
B. Advertising
It is considered that advertising helps in growing your business. No, it is absolutely wrong. It just increases your expenses. Advertising helps when your business is at the peak and it will help in bringing more customers. And the customers will only connect to the one which is famous. Nowadays technology has also grown by which one can easily get to know about your business. The customer will not be convinced by just advertising but will be convinced by your product or service.
So, it is just foolishness if you invest in advertising. Instead, boost your product or service by which the customer will be attracted towards you.