As per Bloomberg, businesses fail within the 1st year and a half. The primary reason is because they suffer huge losses. Here are some root causes as to why businesses fail and what you should do if you want to succeed:
- Dialogue is necessary. The business should be able to find out where they are going right and what the customer is thinking about, not only in terms of the business but also the trends in the market. Most businesses do not dialogue with their customers so they do not know what they should do or what the customer expects or is looking for
- The business should offer some sort of differentiation. Having a business doesn’t mean to get a slice of the pie. Good entrepreneurs should know what their differentiation is to that of the competitors.
- The differentiation is not communicated to the customer in a clear, compelling and concise fashion. The customer does not realize who the business is, what value is brought to the table or else some might go on and on about the messaging and the customer loses interest. There is also a possibility that the right words are not used which will compel the customers to take action.
- Some businesses fail because they do not have a profitable business model needed. New businesses should be lean when it comes to marketing. Experimentation too is something which is of utmost importance for new businesses.
These are some of the reasons why businesses fail and when the new entrepreneur realizes these potential pitfalls, he or she will know what to do to prevent it from happening for their business. It is crucial at all times to be in touch with the market and listen to the customer if one wants to be a success in the business world.