Entrepreneurship is on the vogue: It seems that the entrepreneurship bug has bitten everyone these days as every other day we hear stories of new entrepreneurship ventures. Fresh graduates, salaried employees, housewives, retired people everyone is planning to start his or her own business and earn money. There are so many fresh business ideas bubbling up that often does not get the right opportunities to explore. Although there are banks and various types of investors like venture capitalists, angel investors, private lenders etc. to fund a new business venture that shows good potential to make it big in the future. However, every unique idea that gets funded does not become successful and profitable in the long run. There can be several reasons for business ideas to fail. Some of them are discussed below.
Few reasons for a business failure:
- Lack of planning: It is very important to chalk out a detailed plan before you decide to start a new business. Several backup plans should be prepared in advance so you can apply Plan B or Plan C if in case of Plan A fails in the first place. You must have a good foresight and knowledge about the industry and the market. The latest trends should be analysed to plan the course of actions accordingly. A detailed market research and customer behavioural study from time to time are mandatory to stay updated and perform well.
- Pricing: Most business ventures fail as they are unable to decide on the right pricing model. If you price your services too high, then it might not attract your customers as they don’t have the confidence to invest a high cost in an unknown brand. Higher prices are only advisable when you have earned your own position and brand recognition in the market. Also, if you price your products too low, without any margins, it might help you penetrate the market initially but might affect you in the long run if you fail to earn any profit.
- Bad choices: You must choose the right people who fit perfectly with your business goals. A bad investor or a bad partner might be a pain for you in due course and it might be difficult to get rid of them due to financial or legal issues. Also, a bad employee is a burden in a start-up firm. You don’t have the luxury to continue with an under-performing staff as it is just a waste of money and time. So, choose the best people and discard the people who do not add any value to your business objective. Instead, hire the best ones and retain them as they can be the assets for your business.
There are so many other reasons that might shatter your dreams to become a successful entrepreneur. Thus, excellent business ideas may also fail miserably if you are not aware of the various consequences and prepare yourself before hand to tackle them efficiently.