A thin line between failure and success: How not to go bankrupt in the world overflowing with start-ups
There’s never one single reason for a business to fail. Well, maybe in the case of a natural disaster. But otherwise, a high number of small interlinked missteps is involved in the company’s poor performance. You need to know the possible shortcomings of your business to actively counteract them. Read our guidelines on what to do to avoid losses!
First, get to know all the most frequent reasons for going out of business. Take a look at this great infographic prepared by Forbes and Statista:
Knowing the reasons is not enough, though. Read on to find out how to counteract them.
Ensure enough money to start
Balancing income with expenses might prove tricky in the beginning. Gather enough savings to live off them for a while, or don’t quit your job until your business becomes profitable.
Business model and pivoting
Before you get to any actual work, think all your plans through and write them down. Include all the deadlines and long-term goals. After you finish, get through the development stage, go live, and confront your ideas with reality. Your assumptions, tested in the field, may prove inadequate. Be prepared to sit down and write your business plan all over again. Constantly evolve to stay on top of your game.
Conduct a thorough market analysis
Sadly, it’s not uncommon for wannabe entrepreneurs to come up with an amazing product that no one wants to pay for. All ideas look good on paper, but not everything can be successfully put into practice. To know if your plan is worth executing, check the market, especially the sector where you’ll operate.
Know your competition
We couldn’t stress that enough – do the proper competition research beforehand and keep tabs on your competitors after launch. They’re eagerly waiting for your blunder to take over your customer base. Do your best to be a step ahead of them at all times.
Build the right team
Bad partners and employees are much worse than none. Especially poorly chosen partners can quickly ruin your company. If you want to run your business in partnership with someone, then make sure that he or she shares your vision, and is as ready for sacrifices as you are.
Pro tip: Never employ family members or friends. You will have a really hard time firing them if it becomes necessary.
Make time for your business
There are five basic needs: social life, eating, movement, reproduction and sleep. If you want to be an entrepreneur, then you get to pick only two of them and spend the rest of your time working on your business. But beware of work burnout! Seem impossible? That is the price you pay for being rich someday.
Always gather feedback from customers
Tunnel vision and orientation on pre-established aims help your workflow in the development stage. However, after you go live with your store, stop wearing blinkers and take time to hear what your customers say. Always ask for their opinions and make them feel involved. If you thought that as a store owner you’d be your own boss, think again. You should serve every single customer as if he or she is your boss. Otherwise, they’ll find a store that treats them better.
Take networking seriously
If you want to succeed in the B2B sector, then get your LinkedIn profile to overflow with meaningful connections. How to do this? Attend as many events related to your industry as possible. While being there, ask every person you talk to for a business card. To achieve your B2B goals, and make people more willing to answer your emails, make yourself known in the industry.
Figure out your pricing
Pricing is often the main obstacle to converting a casual visitor into a customer. If people often read about a product on your website, but they buy it somewhere else, then it’s usually because of the price. Take a look at your market analysis report (you should have one!) and figure out competitive prices for your product.
Don’t neglect marketing & SEO
No matter how good your product is, no one will ever buy it, if they don’t know that it exists, and what the benefits of it are. Getting this essential knowledge into the heads of your potential clients is the number one task for your marketing team. To achieve the best results find the channels of contact that your target audience visits on a daily basis. Build your website from the ground up with the use of proven SEO tactics. Remember to spread the news about your business early on, and don’t stop even when the sales pick up.
To spare yourself loses, you need the right approach, preparation, funds, business connections, marketing strategy, and clearly defined aims (that you’re willing to change, whenever it’s necessary). No one ever promised that being an entrepreneur will be a piece of cake. But it can be. Open a digital video games store with CodesWholesale, and gain a highly desirable, retail-ready products with all the essential assets. You can sell them on autopilot from anywhere in the world. Plus, you pay only for the games you sell. There’s no hidden costs or commitments, give it a try!
About the author
- Content specialist and gaming enthusiast. Trained to be a philosopher. Interested in Deep Learning, scalability and startups.